How Can a Stablecoin Be Used in Options Trading Strategies?

Stablecoins are primarily used in options trading as the base currency for collateral or to receive the premium from selling options. By selling a covered call on a volatile token and holding the collateral in a stablecoin, a trader can earn a premium while minimizing the volatility risk of the collateral itself.

They are also used to settle derivative contracts, acting as the low-volatility medium of exchange for profit and loss.