👾Diversified Strategies

Put Option

• When the option is exercised, the seller of the NFT put option is required to deliver the NFTs to the buyer.

• An NFT put option is a bearish trading strategy that reflects a bet on a fall in the underlying asset's price.

• The profit of holding an NFT put option is obtained from the NFT premium, and when the option expires, the value is zero.

Bullish sellers who do not yet own the option NFTs sell naked puts. To stop losses, some traders go short while holding NFTs, which are called covered puts. Or they could simply close their naked position, taking a smaller loss than the case if the option were exercised.

Call Option

• A call option is a contract that gives the owner the right but no obligation to buy a specified amount of NFT at a specified price for a specified period of time.

• Call options can be purchased for NFTs or sold for income purposes or tax management.

• Call options can also be used with spreads or portfolios.

The payoff of a call option is the profit or loss that the buyer or seller of the option makes from the trade. Three key variables to consider when evaluating a call option are strike price, expiration date, and premium. These variables calculate the payoff generated by a call option. There are two cases of call option payoffs.