Author: Lawrence Deacon 2019-01-03 12:07:38
Published on: 2019-01-03T12:07:38+00:00
Cross-asset lightning nodes do not provide premium-free American call options as argued by the author. To explain this, the author provides an example of purchasing 1 WJT for P bitcoins at time t. The formula for this transaction involves K, x_p, and x_i1 & x_i2. The formula ultimately results in a negative value for S(t), which indicates that the option is not profitable for the purchaser.The author's argument is based on the fact that cross-asset lightning nodes are designed to facilitate instant and low-cost transactions across different cryptocurrencies. They do not offer traditional financial instruments such as options, futures, or swaps. Therefore, it is unlikely that they would offer premium-free American call options.Furthermore, the author also argues that American call options are generally not premium-free. They involve a premium payment to the seller in exchange for the right to purchase the underlying asset at a predetermined price. The premium amount is determined by various factors such as the time to expiration, volatility, and interest rates.In conclusion, the author believes that cross-asset lightning nodes do not offer premium-free American call options due to their nature as a cryptocurrency transaction facilitator and the inherent premium payment associated with American call options.
Updated on: 2023-06-02T16:34:49.536720+00:00