☂️ Covered Call Writing

The covered call writing strategy gives the seller of the option the obligation (not the right) to sell the Underlying Asset at a specified Strike price on a pre-determined specified Expiration date.

Users will need to deposit the Underlying Asset into the vault (e.g. if the Vault is a Bitcoin (“BTC”) covered call writing vault, users will need to deposit BTC into the vault).

The Strike price for the vaults are mathematically and/or algorithmically (wherever supported by oracle data) selected to optimize the user’s position.

Investors in the vault will receive Premium from the sale of the options.

At expiration:

If the Underlying Asset is at or falls below the Strike price, the call option expires worthless. If the Underlying Asset appreciates above the Strike price, the investor (seller of the covered call option) may be forced to sell the Underlying Asset at the Strike price, hence giving up the opportunity of further upside exposure.

The vault auto-rolls the invested notional (including any premiums received/withdrawn as applicable) into the next vault at the end of every settlement cycle.

Risk Level: 🔥🔥 / 5 (Low to Moderate)