How can I use a credit call spread in the context of digital currencies?

1 answers

• A-learnerJun 07, 2025 · a month ago
  In the context of digital currencies, a credit call spread can be used as a way to generate income while taking a bearish view on the price of a specific digital currency. By selling a call option with a higher strike price and buying a call option with a lower strike price, you can collect a premium upfront. If the price of the digital currency remains below the higher strike price at expiration, both options expire worthless and you keep the premium. However, if the price rises above the higher strike price, your losses are limited to the difference between the two strike prices minus the premium received. This strategy allows you to profit from a range-bound market or a slight decrease in the price of the digital currency. It's important to carefully assess the market conditions and the potential risks before implementing a credit call spread strategy in the context of digital currencies.
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