How do dividends affect the put-call parity relationship in the cryptocurrency market?

3 answers

• New tricks IdeasNov 11, 2023 · 2 years ago
  Dividends do not directly affect the put-call parity relationship in the cryptocurrency market. Put-call parity is a fundamental concept in options pricing that relates the prices of put and call options with the underlying asset. Dividends, on the other hand, are cash payments made by companies to their shareholders. While dividends can affect the price of the underlying asset, they do not have a direct impact on the put-call parity relationship. However, changes in the price of the underlying asset due to dividends can indirectly influence the pricing of put and call options in the cryptocurrency market.
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• Mian MohsinApr 11, 2024 · 2 years ago
  When a cryptocurrency pays dividends, it can lead to changes in the price of the underlying asset. This can indirectly affect the put-call parity relationship in the cryptocurrency market. For example, if a cryptocurrency pays a large dividend, it may lead to an increase in the price of the underlying asset. This increase in price can impact the pricing of put and call options, potentially leading to changes in the put-call parity relationship. Traders and investors need to consider the impact of dividends on the underlying asset when analyzing the put-call parity relationship in the cryptocurrency market.
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• Brian BandiJun 16, 2022 · 4 years ago
  According to BYDFi, a leading cryptocurrency exchange, dividends can indirectly affect the put-call parity relationship in the cryptocurrency market. When a cryptocurrency pays dividends, it can lead to changes in the price of the underlying asset. These changes in price can impact the pricing of put and call options, potentially leading to deviations from the put-call parity relationship. Traders and investors should carefully consider the impact of dividends on the underlying asset when trading options in the cryptocurrency market.
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