In this video, I discuss how to sell covered calls and cash-secured puts on Bitcoin using LedgerX.

In order to sell a covered call on Bitcoin, you must first purchase the Bitcoin or transfer your Bitcoin to LedgerX. Then you sell ("sell to open") a call that is at the money, or slightly out of the money, against your Bitcoin.

LedgerX currently uses Bitcoin mini contracts, where 100 contracts= 1 BTC. So if you have 1 BTC at LedgerX, you will want to sell 100 calls against it.

If Bitcoin is above the strike price of those calls at expiration, the Bitcoin will be sold for you at that strike price, though you will still get to keep the original premium that you collected when selling the calls.

If Bitcoin is below the strike price of those calls at expiration, those calls will expire worthless, and you will keep you Bitcoin as well as the premium that you collected.

To sell a cash-secured put, you sell a put (or puts) at a strike price that is just below where Bitcoin is currently trading. You get paid a premium for this, though you must remember to have enough cash in your account to buy the Bitcoin at that strike price if the puts are in the money at expiration, and the Bitcoin is "put" to you.

Selling covered calls and cash-secured puts on Bitcoin allows one to make a substantial return on one's investment, because implied volatility is so high for Bitcoin. That being said, I still prefer to hold unencumbered Bitcoin, because I believe it is going to $100,000 and beyond.

Not investment advice! Consult a financial adviser.

The LedgerX exchange:
https://www.ledgerx.com/

Bitcoin puts and calls:
https://www.ledgerx.com/products

Selling call options on LedgerX:
https://support.ledgerx.com/hc/en-us/articles/360044866953-Sell-Call-Options

Matthew Kratter is the author of the Amazon best-seller "A Beginner's Guide to the Stock Market":
https://www.amazon.com/Beginners-Guide-Stock-Market-Everything-ebook/dp/B07S31TBF5

If you like my teaching style and would like to learn more about investing and trading stocks, options, and futures, be sure to check out my online courses here:
https://www.trader.university/join

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