Options Chain on Kyan (Premia V4)

Stepping into the world of options trading starts with mastering the options chain.

With its rows of numbers, terms, and Greek symbols, it might look daunting at first, but understanding it is important for making informed options trading decisions.

Here’s a quick introduction to the Options Chain on Kyan. Stay tuned for a guide on how to interpret the information provided by the options chain.

If you want to learn more about options, visit the Premia Academy.

What is an Options Chain?

An options chain (or option matrix) is a listing of all available options contracts for a particular underlying asset, such as BTC or ETH. It displays detailed information about each contract.

Options chains are typically divided into two sections:

1. Call Options: Contracts giving the buyer the right to purchase the underlying asset at a specified price before the expiration date.

2. Put Options: Contracts giving the buyer the right to sell the underlying asset at a specified price before the expiration date.

Bids and asks for both call and put options are presented side by side for easy comparison.

Components of the Options Chain on Kyan (Premia V4)

An options chain usually displays the options for a given expiration date and it is divided into columns, with each column representing one of the option’s parameters.

On Kyan (Premia V4), users will be able to freely customize their options chain view by adding/removing specific metrics.

Strike Price

This is the price at which the underlying asset can be bought (call) or sold (put) if the option is exercised. Strike prices are usually listed in the middle of the chain, with calls on one side and puts on the other.

Bid and Ask Prices

Bid is the highest price a buyer is willing to pay for the option. Ask is the lowest price a seller is willing to accept. If you’re new to options chains, this might get confusing at first — green (bid) is a sell button, while red (ask) equals to a buy button.

Size

Size is the number of contracts at the best price for the bids and asks of a given option.

Delta

Delta (Δ) is a risk measure. It’s one of the most essential concepts to understand, and shows how much an instrument’s price is expected to change in relation to a $1 move in the underlying asset's price.

• Call options: Delta ranges from 0 to +1. For example, a delta of 0.5 means the option’s price will increase by $0.50 for every $1 increase in the underlying asset.

• Put options: Delta ranges from 0 to -1. A delta of -0.5 means the option’s price will increase by $0.50 for every $1 decrease in the underlying asset.

Theta

Theta (Θ) is another risk measure that shows how much the price of an option decreases as it approaches its expiration date, assuming all other factors remain constant. This is often referred to as time decay.

For example, if an option has a Theta of -0.05, it will lose $0.05 in value each day.

Volume

Trading volume shows how many contracts have been traded during the current trading session. Higher volume can signal stronger interest in a particular option.

Open Interest

This refers to the total number of outstanding contracts that haven’t been settled. It helps indicate the overall market activity for that option.

IV Bid and IV Ask

Implied volatility bid (IV Bid) represents the implied volatility at which buyers are willing to purchase the option and implied volatility ask (IV Ask) shows the implied volatility at which sellers are willing to sell the option.

Rho

Rho measures how much an option's price will change in response to a 1% change in interest rates.

• Call options: Rho is positive, meaning rising interest rates increase the option's price.

• Put options: Rho is negative, meaning rising interest rates decrease the option's price.

Vega

Vega measures how much an option's price will change with a 1% change in implied volatility.

A higher Vega means the option’s price is more sensitive to volatility shifts. Long options (both calls and puts) benefit from increasing volatility, while short options lose value.

Gamma

Gamma measures the rate of change of Delta in response to a $1 move in the underlying asset.

Mark

Mark is the midpoint between the bid and ask prices, often considered the fair value of the option.

Position

Position indicates the number of contracts currently held in a specific option. A positive number shows longs and a negative number shows shorts.

Options Chain on Kyan (Premia V4)

An options chain may look complex at first, but once broken down to the individual components, it becomes an invaluable tool for traders.

Whether in hedging, speculating, or executing advanced strategies, understanding how to read an options chain is key to navigating the options market confidently and making informed decisions that align with the user’s trading goals.

Kyan is built with customizability at its core, providing traders of all levels the tools they need to manage their portfolios and make decisions effectively.

Questions about Options on Kyan (Premia V4)?

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