Can a Non-Fungible Token Be Used to Represent a Traditional Options Contract, and How?

Yes, an NFT (ERC-721) is an excellent vessel for a traditional options contract. The unique token ID and its associated metadata can immutably encode all contract specifics, including the underlying asset, strike price, expiration date, and whether it is a call or a put.

The token itself represents the right, but not the obligation, and can be traded independently of the underlying asset.