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TOKEN
Volt#01: Income generation
Covered Call Overwriting
Generate income through covered call overwriting, which historically produces higher yields in periods of volatility
Strategy Summary
A covered call position involves holding a long position in a particular asset, for example, SOL, and writing a call option on that same asset with the goal of realizing additional income from the option premium. This Volt writes covered call options on leading tokens. By selling covered call options, the profit from an increase in the price of the underlying index above the exercise price, but continues to bear the risk of a decline in the index.
This video explains the strategy and 3 PnL (profit and loss) scenarios when using Friktion's Volt#01:
Explore the math behind the strategy in this Medium article:
How do Covered Calls work?
Medium
Friktion Research Collaborators
Voltage
High voltage represents increased risk, defined by a higher probability of the option being exercised. In return for taking on increased risk, expected option premiums are higher, resulting in higher APYs. In flat markets, tactical traders can use Higher Voltage to gain yield.
Volt#01: High Voltage
Dive Deeper
Video from our partners at Genesis Volatility, explaining how Covered Calls are the OG form of yield farming!
Genesis Volatility
Last modified 3d ago