How does selling puts work in the cryptocurrency market?

1 answers

• Kim KardashianOct 18, 2021 · 4 years ago
  Selling puts in the cryptocurrency market is a strategy that can be used by traders to generate income or acquire cryptocurrencies at a potentially lower price. When selling puts, traders sell put options on a specific cryptocurrency, giving someone else the right to sell them the cryptocurrency at a predetermined price within a specified period of time. In return for selling the put option, traders receive a premium. If the price of the cryptocurrency stays above the strike price until the expiration date, the option expires worthless and the trader keeps the premium. However, if the price of the cryptocurrency falls below the strike price, the trader may be obligated to buy the cryptocurrency at the strike price. It's important to carefully consider the risks and rewards of selling puts and to have a clear understanding of the market conditions and the specific cryptocurrency involved.
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