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The @terra_money's DeFi ecosystem is missing a key financial product:
'Options'
Here's why you should care:
- They have the potential to skyrocket your portfolio
- They protect your folio from price crashes
So, what are options and how do they work?
#ExplainLikeIm5 🧶 👇
'Options'
Here's why you should care:
- They have the potential to skyrocket your portfolio
- They protect your folio from price crashes
So, what are options and how do they work?
#ExplainLikeIm5 🧶 👇
Let's take a publicly-traded stock.
An options contract gives you the right to buy or sell this stock at a specific price.
But you are not obligated to do so.
That means:
You don't have to buy or sell the stock if it's not in your financial interest or advantage.
How?
An options contract gives you the right to buy or sell this stock at a specific price.
But you are not obligated to do so.
That means:
You don't have to buy or sell the stock if it's not in your financial interest or advantage.
How?
Here's how it works in practice.
Let's take two people - Alex and Kate.
Alex believes that the share price of company X will increase to $40 per share.
Currently, it's trading at $30 per share.
So this is what Alex does:
Let's take two people - Alex and Kate.
Alex believes that the share price of company X will increase to $40 per share.
Currently, it's trading at $30 per share.
So this is what Alex does:
