Delivery Date

Understanding the Concept of 'Delivery Date' in Option Trading With Cryptocurrencies

The term 'Delivery Date', in the context of option trading with cryptocurrencies, is a key feature that traders need to understand. More often than not, this phrase might be puzzling, especially for beginners. However, we're here to shed some light on it.

What is 'Delivery Date'?

The 'Delivery Date' is the exact date on which the contract of an option needs to be fulfilled. For this to make sense, one should know that an option contract grants the right, but not the obligation, to purchase or sell a particular cryptocurrency at a preagreed price. The obligation to fulfill the contract arises only when the option contract is exercised, i.e., the right granted by the contract is used.

Importance of 'Delivery Date'

In option trading with cryptocurrencies, the 'Delivery Date' is significant in many ways. It not only helps in strategic planning but also in managing the risk associated with the investment. Crypto traders, particularly those dealing with options, must be very precise about dates to avoid unfavorable market conditions or unexpected price swings.

'Delivery Date' and Expiry Date: Are They Same?

Many people erroneously believe that the 'Delivery Date' and the Expiry Date are the same, but this is not the case. The 'Expiry Date' is the date until which the option contract can be exercised. On the other hand, the 'Delivery Date' is when the underlying crypto asset has to be delivered or received. Hence, the 'Expiry Date' usually precedes the 'Delivery Date'.

Wrap Up

All in all, understanding key trading terms like 'Delivery Date' can aid in better comprehending the way cryptocurrency options function. We hope our definition has cleared up any confusion surrounding this term. Stay tuned for more such helpful entries in our glossary section.