In this era of technological advancement, we find ourselves at a crossroads between traditional finance (TradFi) and the burgeoning field of cryptocurrency (crypto).
Both have their unique appeals and are shaping the way we conduct financial transactions and investments.
While TradFi represents the established, regulated financial systems and instruments we’re all familiar with, crypto introduces a decentralized, highly digital, and often volatile alternative.
The popularity of options strategies has surged in recent years, thanks in part to Wall Street Bets. Is the crypto counterpart different? Is it profitable? Here’s what you need to know.
An Overview of Options
Options are a financial strategy that many investors use to mitigate risk and increase returns. With options, investors can buy or sell securities at a predetermined price within a specific timeframe.
This is known as a physically settled options contract. It provides investors flexibility in managing their portfolios based on market conditions and their own individual objectives.
There are also cash-settled option contracts, and it’s important to understand the differences. Unlike physically settled options, where the underlying asset is delivered to the option holder once the contract expires, cash-settled options are settled with a cash payment instead.
