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When trading options on zkVault, it is important to consider several key parameters that determine the characteristics and pricing of the options.
- 1.Option Type: Options can be either a call option or a put option.
- Call Option: Gives the holder the right to buy the underlying asset at a predetermined price.
- Put Option: Gives the holder the right to sell the underlying asset at a predetermined price.
- 2.Option Position: There are two positions for each type of option.
- Long Option: Buyers of options who pay a premium upfront and have the potential to profit if the option is in-the-money.
- Short Option: Sellers of options who receive an upfront premium but may have an obligation to fulfill the option if it is exercised.
- 3.Underlying Asset: The asset from which the option derives its value.
- For example, in the case of $zkVAULT, a call option allows the buyer to purchase $DPX at a specified price, while a put option allows the buyer to sell $zkVAULT at a specified price.
- 4.Strike Price: The predetermined price at which the option can be exercised.
- For a call option, it is the price at which the underlying asset can be bought.
- For a put option, it is the price at which the underlying asset can be sold.
- 5.Expiration: The date and time at which the option contract expires.
- After the expiration, the option can no longer be exercised.