What is the intrinsic value of a put option in the context of cryptocurrency?
Lukel EvansDec 17, 2021 · 3 years ago1 answers
Can you explain the concept of intrinsic value in relation to put options in the cryptocurrency market? How does it differ from the extrinsic value?
1 answers
- Dec 17, 2021 · 3 years agoIn the context of cryptocurrency, the intrinsic value of a put option is the value that the option would have if it were exercised immediately. It is calculated by taking the difference between the strike price of the option and the current market price of the underlying cryptocurrency. If the market price is below the strike price, the put option has intrinsic value. However, it's important to note that the intrinsic value of a put option can never be negative. If the market price is above the strike price, the put option has no intrinsic value and is considered out of the money. The extrinsic value of a put option, on the other hand, represents the time value and volatility premium of the option, and can be positive or negative depending on market conditions.
Related Tags
Hot Questions
- 97
How does cryptocurrency affect my tax return?
- 84
What are the advantages of using cryptocurrency for online transactions?
- 83
What are the best practices for reporting cryptocurrency on my taxes?
- 73
Are there any special tax rules for crypto investors?
- 54
What are the best digital currencies to invest in right now?
- 52
How can I minimize my tax liability when dealing with cryptocurrencies?
- 44
What is the future of blockchain technology?
- 42
What are the tax implications of using cryptocurrency?