Why Do Crypto Exchanges Prefer European-Style Options for Settlement?
Crypto exchanges often prefer European-style options because their fixed expiration date simplifies the settlement process. It eliminates the need for continuous monitoring and management of potential early exercise, streamlining operations and reducing computational overhead.
This allows for a clean, single-point settlement.
Glossar
Crypto Exchanges
Exchange ⎊ Crypto exchanges represent specialized platforms facilitating the trading of cryptocurrencies, derivatives, and related assets.
Fixed Settlement Time
Schedule ⎊ Fixed Settlement Time refers to the precise, pre-announced moment at which a derivative contract, typically a European-style option or future, is scheduled to expire and undergo final settlement.
Fixed Expiration
Constraint ⎊ Fixed expiration defines a precise, predetermined date and time when a derivative contract, such as a traditional futures or European-style option, ceases to be valid and must be settled.