What Is a ‘Tokenized Option’ and How Does It Relate to a Smart Contract?

A tokenized option is a financial derivative where the rights and obligations of an options contract are represented by a blockchain token. The smart contract acts as the issuer and custodian, encoding the option's parameters (strike, expiration, underlying asset) into the token's metadata and logic.

This allows the option to be traded easily on secondary markets as a standard cryptocurrency token, increasing liquidity and accessibility.