Options markets dampen volatility. Also selling call options is how you guarantee income / get yield, but you still get wrecked long term. I have a friend who was doing with a tech stock. He read books and he even had a mentor who had made $1M doing it with Apple stock for a decade. He owned $200,000 of a stock so was monetizing it through selling calls. Two months after he started, the stock ripped 50%. He got paid $12,000 or so in his process, but he gave up almost $100,000 in gains. So yah volatility dampens but it’s not some foolproof strategy and the people doing it will lose. And yes, bc of volatility, bitcoin has the highest premiums so you make the most if it doesn’t run.
OG whales are yield farming Bitcoin and capping the price?
Jeff Park explains how large holders use the options market to sell covered calls, extracting income while BTC churns sideways.
Video by Rob Wallace
https://blossom.primal.net/47e5485e0d247037da820b881ebda8641069b62f60be2d7e204a660756beefc7.mov
Discussion
If stuff like this happens you have to roll aggressive as fuck, as far out as needed, you should do this immediately before your option goes in the money
He closed it out and bought Bitcoin. Stock hasn’t come back. Just keeps going up. He’s in theory down $114,000 now. At the rate he was winning his options (he was 7 for 8 I think) this was 2 years or so of wins. I comforted him by saying “Look, you didn’t lose. You just won less.”