Bitcoin hits $ 40k, while options priced at $ 300k come into play
Traders will now be able to trade Bitcoin for 300 thousand dollars at the end of the year. Cryptocurrency derivatives exchange Deribit has added a new Bitcoin option contract with a usage price of 300 thousand dollars and a maturity date of December 2021.
We've added the #Bitcoin $300K strike in Dec21 expiry!— Deribit (@DeribitExchange) January 8, 2021
Last week, stock market also added $200k to its system after price of Bitcoin increased from $25k to $32k . Last night, largest cryptocurrency price was based on a limit of $42k. Which caused the stock market to decide to set a new upper limit.
Although there is a serious consensus that bitcoin’s rally will continue, there is no significant mobility in year-end options with a usage price of 100 thousand dollars and above on the Web page where Deribit shows its open positions.
As is known, options trading is usually an indicator of how experienced traders of the market interpret current market prices.
Option contracts are derivative instruments that give the buyer the right to buy or sell the underlying asset at a certain price on or before a certain date. Option buyers pay a premium to get this right to buy or sell. A call option gives you the right to buy an asset, and a put option gives you the right to sell it.
An option contract consists of the following elements:
- Underlying asset: the asset whose price is speculated on, here is Bitcoin.
- Maturity date: the date on which the option expires. After this date, the contract expires.
- Use price: price level at which buyer has the right to buy or sell the underlying asset at maturity.
- Option type: buy or sell option
- Option price: price or premium that buyer pays to the seller for right to buy or sell the asset at use price at maturity date.