How to actually make money in crypto, by not actually using crypto

Discussion in 'Crypto Assets' started by Pekelo, Sep 14, 2024.

  1. Pekelo

    Pekelo

    Don't you guys say I am not being helpful. Here is an idea taking advantage of high dividends and premiums on BITO calls:



    "I'm curious about this so let's math it out.

    Buy $10k of BITO at $20 p/share = 500 shares.

    Sell 5 CCs expiring January '26 $5 strike = $1500 premium each

    $10k - 7500 = $2500 cost basis

    Average dividend since inception is 65 cents per share per month.

    500 x .65 x 16 = $5200

    So you'll recoup your costs completely, and come out $2700 richer. If BTC tanks and BITO is less than $5 come January '26, you still have your shares.

    If BITO is at $40 at that point, you'll have missed out on $7300 in gains.

    Obviously, the dividend is a HUGE unknown variable. Could be more, could be less.

    The sweet spot might be to hope BTC drops significantly 8-12 months in, and then buy your CCs back for the same or less than you sold them for, and then hope BTC rockets back up.

    Does that seem right?"
     
    johnarb likes this.
    • HUGE unknown variable
    • Could be more,
    • could be less.
    • might be
    • to hope BTC drops
    • and then hope BTC

    I haven't read the reddit (yet). But you sure have my hope up now.
     
  2. qwerty11

    qwerty11

    opt assign so no...
     
  3. BKR88

    BKR88

    Bid/Ask on Jan '26 $5 Calls are currently 10.50/14.60 (mid = 12.55).
    BITO price = 18.33 so you need a minimum fill on the call at 13.33.
    Any lower price and you'll get called away right before the first ex. div. with a loss.
    First div. is likely ~1.00 so if you don't get the call sold for ~14.33 you'll probably get called before first ex div.
     
    Primal Trader and johnarb like this.
  4. johnarb

    johnarb

    Just buy bitcoin, Pek... or MSTR and hold
     
  5. Cabin1111

    Cabin1111

    Robinhood, I don't even remember...It happened a few years ago.

    I posted on here, but couldn't find the link. Years ago they had a bad quarter...They were picking up market share, but not making any money. They were/are into Crypto and the twenty something men and women who will have money passed down to them over the years.

    I bought the stock, then did a covered call. Made about a 20% annual return.

    I was playing crypto without playing it...If that makes sense??

    Moved on and didn't bother to look back...
     
  6. bublu

    bublu

    This is the best advice in my opinion and if someone knew how to trade then trade again other crypto assets to make some healthy returns instead of just holding.
     
    johnarb likes this.
  7. S2007S

    S2007S



    Why are bids and asks so wide on options?

    Is it because of demand for a particular stock/etf?
     
  8. 2rosy

    2rosy

    Simple. Create the tokens. Create the exchange.create the wallets.create the hype.create the tools. Create the analytics. Milk
     
  9. BKR88

    BKR88

    No one is interested in trading very deep in the money options.
    Open interest is just 9 for the $5 calls.
     
    #10     Sep 15, 2024
    johnarb likes this.