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How does the butterfly option spread strategy affect the volatility of digital assets?

avatarJessica StewardFeb 18, 2022 · 3 years ago1 answers

Can you explain how the butterfly option spread strategy works and how it impacts the volatility of digital assets?

How does the butterfly option spread strategy affect the volatility of digital assets?
Digital Assets
Butterfly Option Spread Strategy
Volatility

1 answers

  • avatarFeb 18, 2022 · 3 years ago
    The butterfly option spread strategy is an advanced options trading strategy that can be used in the digital asset market. It involves buying and selling options contracts with different strike prices to create a profit zone. This strategy can impact volatility by influencing the demand and supply dynamics of options contracts. When more traders use this strategy, it can increase the trading volume and potentially affect the price volatility of digital assets. However, it's important to note that the impact of this strategy on volatility is not guaranteed and can vary depending on market conditions and other factors.

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