What Is the Risk to the Seller of a Crypto Call Option?
The risk to the seller (writer) of a crypto call option is theoretically unlimited. Since the price of the underlying cryptocurrency can rise indefinitely, the seller is obligated to sell the crypto at the fixed, lower strike price.
As the market price rises, the seller's loss grows without limit. To mitigate this, sellers often "cover" their position by owning the underlying crypto, creating a "covered call."
