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Title: btct.co options Post by: Birdy on May 23, 2013, 11:26:32 PM I don't really understand the option trading in btct.co, is here anybody that has some trading experience and can explain me those?
I get that call is a promise to sell shares and put a promise to buy some. But what exactly are premium and strike? Title: Re: btct.co options Post by: Theraty on May 24, 2013, 12:03:44 AM https://bitfunder.com/asset/TAT.ASICMINER#pane_options
Click the help tab halfway down the page. It explains options there. Title: Re: btct.co options Post by: 101Official on May 24, 2013, 12:05:07 AM Premium is what you pay on top of the strike price. Strike is the agreed-upon price where you can CALL (force the other party to sell to you) or PUT (force the other party to buy from you) the underlying asset.
So, for example: Code: Ticker Type Expires ฿ Strike Quantity ฿ Premium ฿ Total/Share You can purchase the right to CALL 1 share of ASICMINER-PT at ฿1.6, but you will pay a premium of ฿1.68, for a total of ฿3.28 (if you exercise the option). As ASICMINER-PT is currently trading around ฿2.4, it would have to gain SIGNIFICANTLY for you to want to call your option. As in, above ฿3.28 in the next 24 hours or so. If you believe it will, in fact, gain 36% in the next day, you should buy the option. Stranger things have happened. For security, you likely have to put up the whole 3.28 - I don't know as I don't do BTC options, but it makes sense from an exchange point of view. If you don't exercise the option, the strike would likely be returned to you. Title: Re: btct.co options Post by: Birdy on May 24, 2013, 12:33:22 AM Okey, I think I understand the call option now, but I'm still a bit confused about the Put option.
Quote PUT #352 0 d, 23 h, 29 m Cost: 0.02525000 1 Strike: 0.02000000 Premium: 0.00525000 This is an option to sell shares, right? Why does it combine the costs? I get that I have to pay a premium for the option, but then I would sell not buy a share? |