What is the optimal delta for selling covered calls on cryptocurrencies?

1 answers

• Humberto_CarvalhoAug 19, 2023 · 2 years ago
  At BYDFi, we recommend considering a delta between 0.3 and 0.5 when selling covered calls on cryptocurrencies. This range provides a good balance between premium income and downside protection. A delta of 0.3 means there is a 30% chance of the option being in the money at expiration, while a delta of 0.5 means a 50% chance. This range allows you to capture a significant portion of the premium while still having a reasonable chance of the option expiring worthless. However, it's important to note that the optimal delta may vary depending on the specific cryptocurrency and market conditions. It's always a good idea to monitor the market and adjust your delta accordingly.
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