What factors should be considered when choosing between European and American style in cryptocurrency trading?

3 answers

• Nov 24, 2021 · 3 years ago
  One important factor to consider when choosing between European and American style in cryptocurrency trading is the trading hours. European style options can only be exercised at expiration, while American style options can be exercised at any time before expiration. This means that if you prefer more flexibility and the ability to exercise your options early, American style trading might be more suitable for you. On the other hand, if you prefer a more straightforward approach and don't need the flexibility of early exercise, European style trading might be a better fit.
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• Nov 24, 2021 · 3 years ago
  Another factor to consider is the underlying assets available for trading. European style options are typically available for a wider range of assets, including stocks, indices, and commodities. American style options, on the other hand, are mainly focused on individual stocks. So, if you're interested in trading a diverse range of assets, European style trading might be the way to go. However, if you primarily focus on trading individual stocks, American style trading could be a better choice.
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• Nov 24, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, recommends considering the liquidity of the options market as an important factor. European style options tend to have higher liquidity compared to American style options. This means that it may be easier to buy and sell European style options at fair prices. Additionally, European style options are more commonly traded in the cryptocurrency market, which can provide more opportunities for trading and hedging strategies. Therefore, if liquidity and trading opportunities are important to you, European style trading may be the preferred option.
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