How do long calls work in the context of digital currencies?

1 answers

• LyraIncJan 26, 2021 · 4 years ago
  Long calls in the context of digital currencies work similarly to long calls in traditional financial markets. When an investor buys a long call option, they are essentially buying the right to purchase a specific amount of a digital currency at a predetermined price within a certain time frame. If the price of the digital currency rises above the predetermined price, the investor can exercise the option and buy the digital currency at a lower price, thus making a profit. However, if the price of the digital currency does not reach the predetermined price before the expiration date, the investor may lose the premium paid for the option. It's important to note that long calls can be a risky investment strategy and should only be undertaken by experienced traders who understand the potential risks and rewards.
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