Covered Calls (Trading Options & Spot)
Position Setup:
Buy 1 ETH at $2,500 in the spot market.
Sell a covered call option with a $2,700 strike price for a $100 premium.
Market Movement:
ETH price rises to $2,650.
Using the Greeks Dashboard:
Delta Monitoring: The dashboard helps track delta on the covered call. As ETH nears the strike price, delta increases, showing you that your option is moving toward becoming in-the-money.
Theta Decay: With time decay impacting the option, theta helps you evaluate how much premium is eroding. The closer to expiration, the higher the theta. Using this insight, you can decide to let the option expire or buy it back to close the position.
Net Position: You keep the $100 premium while ETH appreciates in your spot position. The Greeks Dashboard provides visibility into how much of the option’s premium is decaying.
Last updated