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covered call and cash secured put pepe unchain Bnb Eth XRP crypto futures coinbase futures binance futures

What is a covered call?

Covered calls deal with call options. A covered put is a bearish strategy, whereas a Covered Call is a bullish strategy. Covered put refers to writing an option against a short position, a borrowed and sold stock. While writing a covered call entails selling the right to purchase a share trader’s own.

Should you invest in a covered call or a cash-secured put?

A covered call strategy will allow you to collect dividends because you own the underlying stock. While a cash-secured put requires a similar level of capital, you don’t own the stock, so no dividends are paid.

What is the difference between cash-secured puts and covered calls?

Cash-secured puts and covered calls may sound like they have different goals, but the ideal outcome is the same: extra income during flat markets. In both trades, the primary profit source is the option premium received, and the upside is limited compared to direct ownership of the underlying stock.

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Risk warning: Digital asset trading is an emerging industry with bright prospects, but it also comes with huge risks as it is a new market. The risk is especially high in leveraged trading since leverage magnifies profits and amplifies risks at the same time. Please make sure you have a thorough understanding of the industry, the leveraged trading models, and the rules of trading before opening a position. Additionally, we strongly recommend that you identify your risk tolerance and only accept the risks you are willing to take. All trading involves risks, so you must be cautious when entering the market.

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