How can I use covered calls to generate income with cryptocurrencies?

1 answers

• Nov 28, 2021 · 3 years ago
  Certainly! Covered calls can be a great way to generate income with cryptocurrencies. Here's how it works: First, you need to own the cryptocurrency you want to use for the covered call. Then, you sell call options on that cryptocurrency. By selling the call options, you receive a premium upfront. If the price of the cryptocurrency stays below the strike price of the call options until expiration, the options expire worthless and you keep the premium as profit. If the price of the cryptocurrency goes above the strike price, the options may be exercised and you may have to sell your cryptocurrency at the strike price. However, you still keep the premium, which helps offset any potential loss. It's important to note that covered calls have limited upside potential if the price of the cryptocurrency surges. So, it's crucial to choose the strike price and expiration date carefully.
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