How to make passive income in crypto

•

Literally, ANYONE can start making passive income by selling crypto options, let me show you how 🧵👇

I use @lyrafinance but you could also try @DeribitExchange, @ZetaMarkets, or any other options protocol. twitter.com/lyrafinance/status/1541581372267327488

Ok, you've chosen the dapp, but how will you know which option to sell?

Here we have to check the condition of the underlying asset (ETH) If it is on a downtrend or uptrend. If it is 📉 then we sell a call. If it is 📈 then we sell a put.

For the sake of this tutorial let's assume ETH won't go down anymore (hopium much?) And so we will sell a put, now what?

After choosing an expiration more or less a week from now, we can see the options we have. You just want to make passive income, without having to worry too much, for that reason we will pick the $1400 strike option, let's look at the stats

These stats tell us the price/premium of the option, the breakeven point, and the last row shows us the "GREEKS" which measure and dictate the price of the option. Let's focus on 2 of them for now, Delta and Theta

Delta shows by how much will the price of the option will change if the underlying asset (ETH) changes by $1. But it also shows us the probability of this option expiring in the money (going against us) This means there's an 11% chance that by Aug 26th ETH will be under $1400

Then there's theta. Theta shows the daily time decay of the option, the closer it gets to the expiration day, the higher the decay will get. Theta is the seller's friend!

Now with that out of the way, let's make some money. Once you chose this option, you need to tell the protocol the size of your position, let's assume we have $120 sUSD already available in our wallet.

So by depositing this $120 in, you sell this option and collect a $1 premium, that's a 0.84% yield in a week. Worst case: If ETH closes under breakeven point by Aug 26th we start losing part of the $120 deposited. Best case: ETH above 1,4k, you keep premium and collateral

Is that worth it? Well if you do this weekly, and each month you add another $100, after one year you'd have a 54% APY. I've seen MFs fight for 20% APY on anchor, so I'd take this yield ANY DAY!

This was a simulation selling the safest option strike the platform allowed us, once you start to understand more, you can choose different strikes, I personally chose a Delta between 0.20-0.35, this gives me a higher yield.

These crypto options work differently than American options. Instead of having to settle with the underlying asset when assigned, you settle that in cash (sUSD) so you don't need to have ETH nor need to buy/sell it when assigned.

If this was helpful, consider retweeting this, also follow me, I always post my weekly option trades here for everyone to see. Cheers ✌️ twitter.com/vincesector/status/1560968711321829377

How to make passive income in crypto

Write & publish everywhere with Typefully

Write & publish everywhere
with
Typefully