This week I've made a 3.4% return on my investments by selling cash secure puts on $ETH.
I just sold a new covered call expiring next Friday the 12th and collected a 3.2% premium, here's how I did it: ๐งต๐
First I went to @lyrafinance and under the TRADE tab, I selected SELL CALL and selected Aug 12th as my expiration date.
Scrolling down we can see all the strikes, breakeven points, and all the way to the right, the price of these options.
I ended up picking the $1800 strike, with a nice 0.26 delta (at the time) and good theta.
The nice thing about Lyra is that you can buy a fraction of a contract, meaning you don't need a full ETH (or sUSD equivalent) as collateral.
So I sold 0.45 of a contract (~$500 sUSD in collateral) and collected a $16.5 premium that I get to keep whatever happens.
Now, what is my maximum risk/reward here?
If ETH goes over $1,843.10 (My break-even price) by the expiration date, I will lose part of my collateral deposited, the higher it goes, the more I lose in collateral.
If ETH by expiration date is below $1800, the option expires worthless, I get my collateral back and keep my premium.
Since these are European options, I don't need to have ETH as collateral, I can simply use sUSD because if assigned, I'd have to pay in sUSD and not ETH.
My plan is to compound these premiums weekly, accelerating the compounding interest curve, and with some calculations, we can see that by starting with $500 with a yield of 3% weekly and depositing $200 per month, we have a projected APY of 365%
This might not be much, but there are a lot of people losing their money on ponzinomics-reliant protocols for way less yield after sales tax and token dilution.
Here with a little understanding of the greeks and tom TA, you can pretty much guarantee a reliable weekly yield.
I'll be keeping you guys updated on my positions here, so make sure to follow me @vincesector, also consider liking and retweeting this thread.
Peace โ๏ธ
twitter.com/vincesector/status/1555228904180301825
Everton Matheus
@vincesector
Marketing & Community | Content creator |I make money with crypto and YouTube Teaching people about "financial crypto stuff" ๐ง๐ท ๐ฎ๐น Opinions are my own!
