Can you provide an example of a covered call strategy for cryptocurrencies?

1 answers

• Siddharth YellurDec 03, 2020 · 5 years ago
  Sure thing! Let me explain a covered call strategy using an example. Imagine you own 100 units of Ripple and you believe its price will remain relatively stable in the coming weeks. You can sell a call option with a strike price slightly higher than the current market price of Ripple. If the price of Ripple stays below the strike price until the option expires, you keep the premium you received from selling the option. If the price of Ripple rises above the strike price, the buyer of the call option can exercise it and you will have to sell your Ripple at the strike price. This strategy allows you to generate income while still participating in potential upside gains of Ripple.
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