Put Option On Compound Tokens

The prices of cryptocurrencies can often be so unpredictable especially for new cryptocurrencies.

Compound(COMP) was only up for trading on 18 June 2020. It was only traded for about $80 on the first day but this price multiplied almost more than 4 times within 3 days.

Coinbase has also launched Compound Tokens as a tradable cryptocurrency on 23 June 2020 on Coinbase Pro.

The price of Compound(COMP) was US$255.83 at the point of this post.

With this sudden rising star cryptocurrency, it was hard not to pay attention to it.

Opyn decided to seize this opportunity to quickly offer a put option for COMP.

Below is an explanation of what is a put option. https://www.youtube.com/watch?v=FAwDrUqpGUI Video Source

Below is a nice videoclip on how to Compound can help one to earn. https://www.youtube.com/watch?v=VYp9oiEI7GU Video Source

Put option is really like an insurance to safeguard buyers from losing money with a strike price.

The strike price of COMP was set at US$150. If the price of this token ever drops to this price or lower, traders who have paid for the put option can sell their COMP at strike price of US$150.

Those who had bought COMP at US$80 in the beginning would never lose money if they ever decide to hodl their COMP to see whether it can go any higher by getting a put option as extra insurance.

Nevertheless, this put option will expire on 3 July 2020.

I guess those who want to stay on the safe side, buying a put option can really help to calm their minds and hearts even if the price drops below $150.

If the price goes even higher, they can celebrate as the small fee of the put option would have been easily covered by the profit they gained.

Thanks for reading this short post and you can find out more about the put option offered by Opyn in the below link. https://www.coindesk.com/defi-platform-opyn-launches-put-options-on-compound-token

Posted Using LeoFinance