Does the Same Logic Apply to American Put Options on High-Yield Crypto Assets? ⎊ Path

Does the Same Logic Apply to American Put Options on High-Yield Crypto Assets?

Yes, the logic is reinforced for American put options on high-yield crypto assets (e.g. those with high staking rewards). Early exercise of the put would mean selling the underlying asset and receiving cash.

The cash can then be invested at the risk-free rate, which may be lower than the staking yield being forfeited. This forfeiture reduces the incentive for early exercise.

How Do American-Style Options Differ from European-Style Options regarding Time Decay?

What Is the Impact of Staking Rewards on the Valuation of an American Call Option on a Proof-of-Stake Cryptocurrency?

What Is the Maximum Value of a Put Option, and How Does This Relate to Early Exercise?

Does the Early Exercise Rule Apply Equally to American-Style Put Options?

Does the Early Exercise Feature Apply to American-Style Put Options as Well?

What Is the Relationship between the Time Value of an Option and the Likelihood of Early Exercise?

How Does the Early Exercise Boundary for a Put Option Change as Expiration Approaches?

How Does the Concept of Early Exercise Affect the Premium of an American Call Option?

Glossar

Staking Yield

Return ⎊ Staking Yield is the annualized rate of return generated from an asset committed to securing a Proof-of-Stake network, paid out in the native token as a reward for validation service.

American Put Options

Valuation ⎊ American Put options, within cryptocurrency derivatives, represent a right ⎊ not an obligation ⎊ to sell an underlying crypto asset at a predetermined price on or before a specified date, differing from European-style options by allowing exercise at any time prior to expiration.