Covered call is an option strategy that involves buying a call option and simultaneously owning the underlying asset, which are cryptocurrencies, especially Bitcoin.
Understanding Options Trading
Options trading on cryptocurrency grants the holder the right but not the obligation to purchase in a call option and the right but not the obligation to sell in a put option on an underlying cryptocurrency at a pre-decided price known as the strike price (X) on or before a pre-specified date known as the expiration date abbreviated as ‘t’.
Rather than holding the actual asset, traders trade on the value fluctuations of the underlying cryptocurrency. If the option buyers believe that the prices will rise, they will buy call options, and if they believe that the prices will move in the opposite direction, they will buy put options.
The advantage of this approach is that it limits the possible losses with unlimited profit at the payment of a nominal premium. It can result in pro
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