What Is an Options Market?
The options market is a public place to trade options.
It provides cryptocurrency traders a place to buy or sell digital currencies at a set price and time.
Basic terms used in the market include call/put options and strike price.
Exploring the Dynamics of Call and Put Options
Call and put options are opposites.
To elaborate, we can equate call options to buy orders and have a predetermined price and date.
Options market participants buy calls when the price of a tracked asset is projected to increase in value.
In contrast, investors place sell calls when the market has a bearish outlook.
Put options, on the other hand, are sell orders. As such, they indicate a willingness by an option holder to liquidate their position.
The predetermined price is called a strike price. Note that either American or European option rules govern the options market.
Apart from the above terms, an options trader needs to understand other words such as Greeks. Greeks are symbols that outline the risks during options trading.