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Volt#02: Sustainable Stables
Cash-secured Put Selling
Start earning @ app.friktion.fi/stables
The “Cash Secured Put” is a stablecoin strategy with a similar payout profile to the “Covered Call”. Traders will sell a put option and maintain enough cash to purchase the underlying asset at the predetermined strike price. This strategy is relatively low risk because a 100% collateral ratio is maintained.

Strategy

A cash-covered put is a 2-part strategy that involves selling an out-of-the-money put option while simultaneously setting aside the capital needed to purchase the underlying stock if it hits the option’s strike price. The goal of this strategy is to acquire the stock at a lower price than the market’s offering if the option gets assigned to you.
By selling a cash-covered put, you collect money (the premium) from an option buyer. The buyer pays this premium for the right to sell you an asset at the set strike price.

Risks

During extreme downward market moves, if spot price moves below the asset's strike price it may result in loss of principal. Currently the Volts are cash-settled meaning the deposits are not used to buy back the underlying asset. For insights into historical performance you can explore our Analytics page.

Performance

All strategy performance and returns data can be easily found on our Analytics page linked below. To find a tutorial and guide for this, you can visit the Analytics page of our Documentation.

Learn more about how this strategy works!