Crypto Trading Binance Options 3

Question 1

What does the Greek 'Theta' represent for a Binance option?

Accepted Answer

Time decay of the option's value

Answer

Theta measures how much an option loses value as time passes toward expiry.

Question 2

A put option on Binance becomes more valuable when the underlying price does what?

Accepted Answer

Falls below the strike

Answer

A put gains intrinsic value as the underlying price falls below the strike.

Question 3

What is meant by an option being 'in-the-money' (ITM)?

Accepted Answer

Exercising it would be profitable in intrinsic terms

Answer

An in-the-money option has intrinsic value, meaning exercising it would yield a gain.

Question 4

On Binance Options, who receives the premium when a contract is sold?

Accepted Answer

The option seller (writer)

Answer

The seller (writer) of an option collects the premium paid by the buyer.

Question 5

What does 'implied volatility' indicate in options trading?

Accepted Answer

The market's expectation of future volatility

Answer

Implied volatility reflects the market's forecast of how volatile the underlying will be.

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