From 1858b40834b9bf96dd3acc105a56a5899d2cce76 Mon Sep 17 00:00:00 2001 From: apo77yon <126520850+apo77yon@users.noreply.github.com> Date: Wed, 22 Mar 2023 18:33:57 -0700 Subject: [PATCH] Update options.md --- MEV_and_trading/derivatives/options.md | 1 + 1 file changed, 1 insertion(+) diff --git a/MEV_and_trading/derivatives/options.md b/MEV_and_trading/derivatives/options.md index 64f829d..dfea726 100644 --- a/MEV_and_trading/derivatives/options.md +++ b/MEV_and_trading/derivatives/options.md @@ -6,6 +6,7 @@
+* **options can be used to speculate on the future price and volatility of an asset, and to manage risks in a portfolio.** * options can be thought of as "insurance-like" contracts where one pays a premium upfront. profits come from "disaster events", with **capped losses** and **unlimited upsides**. * purchasers of options receive the **right** to buy or sell the underlying asset at a predetermined **strike price**. **option chains** list **calls** (ability to buy the asset) and **puts** (ability to sell the asset) for a given expiration across a variety of **strikes**. * options also gives leverage by chasing cheaper premiums (e.g. shortening expirations).