What Is a “Covered Call” Strategy and How Does It Relate to Yield Generation on a Crypto Asset?
A covered call strategy involves holding a long position in a crypto asset (e.g. Bitcoin) and simultaneously selling (writing) a call option on that same asset.
The "covered" part means the trader owns the underlying asset, limiting their risk if the option is exercised. The strategy generates immediate income from the option premium.
It is a yield generation technique where the trader accepts capping their potential upside gain in exchange for the premium income.
