Detailed explanation of the basic knowledge of currency circle options delivery

Cryptocurrency options delivery means that when the option contract expires, the buyer can purchase or sell the underlying asset according to the agreed obligation. Types include physical delivery (buying and selling the underlying asset) and delivery-for-difference (settling the difference only). The delivery process includes steps of selecting a method, determining the settlement price and executing the delivery. Delivery terms include underlying assets, expiration date, exercise price, contract quantity and delivery method. Considerations include the buyer’s obligation to exercise rather than deliver, the consequences of a seller’s default, and the possible tax implications of physical delivery.

Basic knowledge of currency option delivery

What is currency option delivery?

Cryptocurrency option delivery means that when the option contract expires, the buyer has the right to purchase or sell the underlying asset (such as cryptocurrency) at the agreed price, and the seller is obligated to execute the transaction at this price.

Types of delivery

There are two main types of currency option delivery:

• Physical delivery: The buyer receives actual ownership of the underlying asset.
• Difference delivery: Buyers and sellers only settle the difference in the price of the underlying asset.

Delivery process

The currency option delivery process usually includes the following steps:

1. Select the delivery method: The buyer and the seller negotiate to choose physical delivery or differential delivery.
2. Settlement price determination: At the time of delivery, the settlement price of the underlying asset is usually determined according to the price published by the exchange or OTC trading platform.
3. Delivery execution: The buyer pays the settlement price, and the seller delivers the underlying asset (physical delivery) or pays the price difference (difference delivery).

Delivery Terms

Cryptocurrency option delivery contracts usually contain the following terms:

• Underlying Asset: The type of cryptocurrency to be delivered.
• Contract expiration date: The time when the delivery contract expires.
• Exercise price: The price at which the buyer can exercise the option to buy or sell the underlying asset.
• Contract quantity: The quantity of the underlying asset in the delivery contract.
• Delivery method: Physical delivery or price difference delivery.

Notes

• Exercise and non-delivery: The buyer has the right to exercise but is not obliged to deliver.
• Consequences of breach of contract: If the seller fails to fulfill its delivery obligations, it may result in fines or legal proceedings.
• Tax Impact: Physical delivery may incur capital gains taxes or losses.

The above is the detailed content of Detailed explanation of the basic knowledge of currency circle options delivery. For more information, please follow other related articles on the PHP Chinese website!