How does selling calls work in the world of digital currencies?

1 answers

• ThabisoJul 07, 2024 · a year ago
  Selling calls in the world of digital currencies is a strategy that can be used to generate income or hedge against potential losses. When you sell a call option, you are essentially giving someone else the right to buy a specific cryptocurrency from you at a predetermined price within a certain time period. In return, you receive a premium. If the price of the cryptocurrency remains below the strike price, the call option expires worthless and you keep the premium. However, if the price of the cryptocurrency rises above the strike price, the buyer can exercise their right to buy the cryptocurrency at the strike price. This means you would need to sell the cryptocurrency at a potentially lower price than the current market value. It's important to have a solid understanding of options trading and the risks involved before selling calls in the digital currency market.
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