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RE: Daily Crypto Markets Live Blog: Bitcoin Trying To Hold $30K (05/20/22)

in LeoFinance4 years ago

If BTC > $29k, then option sellers will have to sell BTC at 29k. If they don't have BTC, it means they must buy BTC at the current price.

If BTC < 29k, option sellers don't have to do anything and option buyers won't exercise the option because they can buy BTC for cheaper off the market.

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Interesting how options work.

Options are basically insurance. I pay someone some money to get the right to buy X at a price of Y. If the price of X is less than Y then there is no point in exercising your right.

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