How Do Financial Derivatives like Options Relate to the Perceived Intrinsic Value of a Token?

Options allow investors to express a view on a token's future price volatility and direction without buying the underlying asset. The price of a call option provides a lower bound for the expected future price, and options trading volume can indicate market sentiment about the token's volatility.

High implied volatility (IV) from options prices suggests the market anticipates significant price movements, potentially indicating a gap between current market price and perceived intrinsic value. Derivatives markets provide a form of price discovery that can inform valuation.