During a recent discussion, Park elaborated on the concept of exercisable risk, which refers to the total value of option contracts that have been exercised or converted into actual shares. In the case of IBIT, this percentage currently stands at less than 0.5% of the company’s outstanding shares. This is significantly lower than the industry standard of around 7%, making IBIT’s exercisable risk quite minimal in comparison.
To put this into perspective, let’s consider an example. Bitcoin CME futures contracts allow for trading of up to 2,000 contracts. If we were to apply this same ratio to IBIT, it would equate to a staggering 175,000 contracts. This illustrates just how small the 0.5% figure truly is in relation to the company’s overall operations.
By maintaining a low exercisable risk, IBIT is able to mitigate potential losses and maintain a stable financial position. This strategic approach sets them apart from others in the industry and demonstrates their commitment to prudent risk management practices.
