In Cryptocurrency Options, What Typically Serves as the Underlying Asset?
The underlying asset is typically a major, highly-liquid cryptocurrency like Bitcoin (BTC) or Ethereum (ETH). Some exchanges also offer options on other high-cap altcoins.
The asset must be standardized and its price easily verifiable. Its volatility directly influences the option's premium.
Glossar
Bitcoin (BTC)
Asset ⎊ Bitcoin, symbolized as BTC, functions as the foundational, non-sovereign digital asset underpinning a vast ecosystem of cryptocurrency derivatives.
Volatility
Measurement ⎊ Volatility, in quantitative finance, is the statistical measurement of the dispersion of returns for a given financial asset, typically quantified by the annualized standard deviation of its price movements.
Tokenomics
Science ⎊ Tokenomics is the comprehensive study and design of the economic systems governing a crypto asset, integrating monetary policy, incentive engineering, and governance structures to ensure the network's long-term security and value accrual for stakeholders.