MoonXBT American standalone options trading examples.
American standalone call option
On November 18, 2021, Jack purchased the following product:
Product Type |
Trading Currency |
Exercise Price |
Order Volume |
Expiration date |
Option Premium |
American Call Option |
BTC |
50,000 |
0.5 |
18-12-2021 |
2000 USDT |
1. On November 30, 2021 (the option has not yet expired), Jack chooses to exercise the option early. There is no return if the settlement price is 48000 USDT (the settlement price is less than or equal to the exercise price). If the settlement price is 55000 USDT (the settlement price is greater than the exercise price), the option return = 0.5 * (55000 - 50000) = 2500 USDT.
Option order volume * (settlement price - exercise price) = the option return
2. On December 18, 2021 (the option expiration date), there is no return if the settlement price is 48000 USDT (the settlement price is less than or equal to the exercise price). If the settlement price is 55000 USDT (the settlement price is greater than the exercise price), the option return = 0.5 * (550000 - 50000) = 2500 USDT
Option order volume * (settlement price - exercise price) = the option return
Note:
The settlement rules for early exercise and exercise at expiration are the same. Only the time at which we obtain the exercise price is different.
American standalone put option
On November 18, 2021, Jack purchased the following product:
Product Type |
Trading Currency |
Exercise Price |
Order Volume |
Expiration date |
Option Premium |
American Put Option |
BTC |
50,000 |
0.5 |
18-12-2021 |
2000 USDT |
1. On November 30, 2021 (the option has not yet expired), Jack chooses to exercise the option early. There is no return if the settlement price is 55000 USDT (the settlement price is greater than or equal to the exercise price). If the settlement price is 45000 USDT (the settlement price is less than the exercise price), the option return = 0.5 * (50000 - 45000) = 2500 USDT
Option order volume * (exercise price - settlement price) = the option return
2. On December 18, 2021 (the option expiration date), there is no return if the settlement price is 55000 USDT (the settlement price is greater than or equal to the strike price). If the settlement price is 45000 USDT (settlement price is less than the exercise price), the option return = 0.5 * (45000 - 50000) = 2500 USDT
Option order volume * (settlement price - exercise price) = the option return
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