What factors determine the intrinsic and extrinsic values of options in the cryptocurrency market?

3 answers

• It's yasmineAug 08, 2020 · 5 years ago
  The intrinsic value of an option in the cryptocurrency market is determined by the difference between the current price of the underlying asset and the strike price. If the option has a positive intrinsic value, it means that exercising the option would result in a profit. On the other hand, the extrinsic value of an option is influenced by factors such as time to expiration, volatility, and market sentiment. These factors can affect the perceived probability of the option being profitable and therefore impact its extrinsic value.
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• Trevino FaulknerOct 19, 2020 · 5 years ago
  When it comes to options in the cryptocurrency market, the intrinsic value is all about the numbers. It's the difference between the current price of the cryptocurrency and the strike price. If the option is in-the-money, meaning the strike price is lower than the current price, it has positive intrinsic value. The extrinsic value, on the other hand, takes into account factors like time, volatility, and market conditions. It's the extra premium you pay for the potential upside of the option. So, the intrinsic value is like the solid foundation, while the extrinsic value is the icing on the cake.
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• Brantley SinclairAug 09, 2025 · 3 months ago
  In the cryptocurrency market, options' intrinsic value is determined by the relationship between the strike price and the current price of the underlying asset. If the strike price is favorable compared to the current price, the option will have a positive intrinsic value. The extrinsic value, on the other hand, is influenced by various factors such as time decay, implied volatility, and market demand. These factors can affect the perceived value of the option beyond its intrinsic value. It's important to consider both intrinsic and extrinsic values when evaluating options in the cryptocurrency market.
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