What factors influence the theoretical option price in the cryptocurrency market?

1 answers

• CarieArieApr 17, 2021 · 5 years ago
  When it comes to the theoretical option price in the cryptocurrency market, several factors come into play. The underlying price of the cryptocurrency is a key factor. If the price of the cryptocurrency is high, the option price will also be high. Another important factor is the volatility of the cryptocurrency. Higher volatility leads to higher option prices. The time to expiration of the option is also significant. The longer the time to expiration, the higher the option price. Additionally, the risk-free interest rate affects the option price. A higher interest rate will increase the option price. Finally, market sentiment and demand for options can impact the theoretical option price. If there is high demand for options, the price may be driven up. These factors interact to determine the theoretical option price in the cryptocurrency market.
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