... to fulfill the terms of the contract if the buyer decides to exercise their right. This is different from futures, where both parties are obligated to fulfill the terms of the contract. Main Types of Options: A Detailed Explanation 1. By Type: Call and Put Call Option A Call option gives the buyer the right to buy an underlying asset (such as a stock, commodity, or currency) at a predetermined price (strike) in the future. This means that the buyer can exercise their right if the market price of the asset at ...

... approximately $112,000 for BTC—this price point has the highest concentration of interest for the expiring options. In other words, $112,000 serves as a rough "maximum pain" level for this expiration: at this price, the largest number of options (both call and put) would expire worthless. Option sellers would achieve maximum profit if the price is close to $112,000 at the time of settlement. Some analysts note the "gravity effect"—the tendency for prices to gravitate towards such key levels as the ...

... on the expiration date. This limitation makes them less flexible but simplifies risk management for sellers by eliminating the possibility of early exercise. Call: Grants the right to buy the underlying asset at a fixed price on the expiration date. Put: Grants the right to sell the underlying asset at a fixed price on the expiration date. Example: An investor purchases a Call option for a company's stock with a strike price of $100 and an expiration in three months. If on the expiration date the stock price is $120, they can exercise their right, buy the shares at $100, and realize a profit of $20 (after deducting the premium). How Do European Options Work? Option Purchase: The ...

American options are a versatile tool that allows you to flexibly respond to market changes, manage risks, and profit from price fluctuations. In this article, you will learn how American options work, how they differ from European options,... ... examples. What is an American option? An American option is a contract that gives the buyer the right, but not the obligation: Call: buy the underlying asset (e.g. stocks, commodities, currency) at a fixed price (strike). Put: sell the underlying asset at a fixed price. An important feature of an American option is the ability to exercise at any ...

... maximum interest in options positions is concentrated. For Bitcoin, this zone of maximum interest (analogous to the "max pain" concept) in August is around the $100,000 mark for BTC. This is where the largest number of open contracts — both call and put options — are concentrated. In the case of Ethereum, the key strike is located around $2,500 for ETH. The proximity of market prices to these zones indicates that a significant number of options may expire out of the money, benefiting option sellers....