How can delta options be used to hedge against price volatility in digital currencies?

1 answers

• Feb 18, 2022 · 3 years ago
  Delta options are a powerful tool for hedging against price volatility in digital currencies. They allow investors to profit from the price movements of the underlying asset without actually owning it. For example, if an investor believes that the price of Bitcoin will increase in the near future, they can purchase a delta call option. This option gives them the right to buy Bitcoin at a predetermined price, regardless of the actual market price. If the price of Bitcoin does indeed increase, the investor can exercise the option and buy Bitcoin at the lower predetermined price, effectively hedging against the price volatility. Delta options provide a way for investors to take advantage of the potential price gains in digital currencies while minimizing their potential losses.
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