How does a short call option work in the context of cryptocurrency trading?

1 answers

• Nov 27, 2021 · 3 years ago
  In the context of cryptocurrency trading, a short call option can be a useful strategy for generating income or hedging against potential losses. When you sell a short call option, you receive a premium upfront, which can provide immediate income. If the price of the underlying cryptocurrency remains below the strike price, the option will expire worthless and you keep the premium. However, if the price rises above the strike price, you may be obligated to sell the cryptocurrency at the strike price. This can result in a loss if the price continues to rise. It's important to carefully consider the risks and potential rewards before engaging in short call option trading in the cryptocurrency market. Please note that this answer is for informational purposes only and should not be considered as financial advice. It's always recommended to consult with a professional financial advisor before making any investment decisions.
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