What is the intrinsic value of a cryptocurrency option?

1 answers

• Farzana FasilNov 16, 2024 · a year ago
  The intrinsic value of a cryptocurrency option is a concept that is often misunderstood. It is not the same as the market value or the price of the option itself. Instead, it refers to the value that the option would have if it were exercised immediately. In other words, it is the difference between the current price of the underlying cryptocurrency and the strike price of the option. If the option is in-the-money, meaning the current price is higher than the strike price for a call option or lower for a put option, the intrinsic value is positive. If the option is out-of-the-money, the intrinsic value is zero. Traders and investors use intrinsic value to determine whether an option is worth exercising or not. If the intrinsic value is positive, exercising the option would result in a profit. If the intrinsic value is zero or negative, it would be more beneficial to let the option expire worthless or sell it in the market.
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