What are the risks and benefits of covered put writing in the digital currency space?

1 answers

• Anu GillJan 06, 2024 · 2 years ago
  Covered put writing in the digital currency space is a popular strategy used by investors to generate income and protect against downside risk. This strategy involves selling put options on digital currencies that the investor already owns. The benefit of this strategy is that it allows investors to earn premium income while potentially buying more of the digital currency at a lower price. However, there are risks involved. If the price of the digital currency increases, the investor may miss out on potential gains. Additionally, if the price drops significantly, the investor may be obligated to buy more of the digital currency at a higher price. It's important for investors to carefully assess their risk tolerance and market conditions before using this strategy.
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