Define a "Call Option" and a "Put Option" in the Context of Cryptocurrency Trading ▴ Learn

Define a “Call Option” and a “Put Option” in the Context of Cryptocurrency Trading.

A call option gives the holder the right, but not the obligation, to buy a specified amount of cryptocurrency (e.g. ETH) at a set price (strike price) on or before a certain date.

A put option gives the holder the right, but not the obligation, to sell the cryptocurrency at the strike price. These instruments are used to bet on price direction (call for up, put for down) or to hedge existing crypto holdings.

The buyer pays a premium for this right.

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