How can writing covered puts help investors protect their cryptocurrencies?

1 answers

• Mar 20, 2022 · 3 years ago
  Writing covered puts is a risk management strategy that can help investors protect their cryptocurrencies. By selling put options on their holdings, investors can generate income and potentially lower their average cost of acquisition. If the price of the cryptocurrencies falls below the strike price of the put option, the investor is obligated to buy the cryptocurrencies at that price. However, the premium received from selling the put option can help offset the cost of buying the cryptocurrencies. This strategy allows investors to limit their downside risk and potentially profit from market volatility.
  611306