Looking for some insight on a potential trade. Considering doing covered calls on Deribit. They have one and two weeks out, one month, 3 months and 6 months. What parameters would people use for this? ITM, ATM, OTM How long till expiry, etc. Returns show about 180% annualized for the one week calls. BTC Vol is about 45% with high fluctuations.
Ok I'll bite. I have looked at this back in 2017 but CC's don't make sense in a raging bull market. Now they might. You got me to revisit this. Keep in mind BTC/alt vol is sky high still compared to traditional assets so there might not be a point to take on that CC risk profile if you are bullish. Also, you don't get paid out in USD unless Deribit changed something recently. You get paid out in BTC so you also have a constantly fluctuating asset for your P/L.
Most important thing to me would be liquidity and spreads in near months, near money options. If it is difficult to get in and out at reasonable IVs then why bother? there are other trades. Edit: Didn't know you got paid in bitcoin. Altogether seems like a tough way to trade. Making a buck with options is hard enough.