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How does a covered call strategy work in the context of cryptocurrency trading?

avatarNEERAJDec 26, 2021 · 3 years ago1 answers

Can you explain how a covered call strategy works in the context of cryptocurrency trading? What are the key principles and steps involved?

How does a covered call strategy work in the context of cryptocurrency trading?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    In the context of cryptocurrency trading, a covered call strategy can be implemented using options contracts available on various exchanges. For example, on BYDFi, you can sell call options on your cryptocurrency holdings and earn premiums. This strategy allows you to generate income while still holding onto your cryptocurrencies. However, it's important to note that options trading involves risks, and it's crucial to understand the mechanics of options contracts and the potential outcomes before engaging in this strategy. Always do your own research and consider consulting with a financial professional before implementing any trading strategy.