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Author Topic: btct.co options  (Read 415 times)
Birdy
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May 23, 2013, 11:26:32 PM
 #1

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?
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May 24, 2013, 12:03:44 AM
 #2

https://bitfunder.com/asset/TAT.ASICMINER#pane_options  

Click the help tab halfway down the page. It explains options there.
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May 24, 2013, 12:05:07 AM
 #3

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
ASICMINER-PT CALL 1 d, 0 h, 13 m 1.6        1        1.68        3.28

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.



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Birdy
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May 24, 2013, 12:33:22 AM
 #4

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?
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