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Still not a lot of volume out there
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FYI if we get a 30% correction that will put us near 40k. A 30% correction is definitely possible.
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Hmm, those in the US are going to wake up do another decent BTC sale. I wonder if some of Saylor's conferrence goers will take the opportunity to load up on some, just like Tesla did last last month.
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God that is another ugly looking drop. I mean shit we are where we were 1 week ago. We're poor again  Plans for volcano base on hold. Going to have to go with plain old underwater base instead. |
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God that is another ugly looking drop. I mean shit we are where we were 1 week ago. We're poor again |
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Now 20% with no risks and a perfect hedge? ELI5
I think explaining anything to you is not a good use of my time, however, that is an investment that you might be more interested in as it is perfectly suited to those who hold fiat, rather than bitcoin, and don't want to expose themselves to the risk of capital gains or losses. the bolded part it the issue (seems to me) most here are just long term hodl mode peeps. but please explain, i wouldnt mind it. im not too bright but am good at learning from my mistakes. ive run napkin math and i almost always would have come out ahead if i straight up hodled btc instead of trying fancy stuff like that in my endeavors of the past. because it was too easy to lose compared to the almost 100% gaurentee that btc will rise over the long term. hodling is hands off, just sit back and relax mode. perfect for me. fancy stuff you have to actively watch and worry about.. nah ill pass at the moment. Well, as I said it's best to have fiat (shitcoin) for this one. Which is why I won't do it. But, basically you buy however many BTC on the spot for current price of 55000. At the exact same time you sell a future, perhaps Sep 26th for this example, for the same number of BTC at a current price of 62700. profit equals 7,700 minus fees per coin This can be done using CBOE and CME as well as many others, perhaps less reputable exchanges. The risk for this trade is couter-party only and of course opportunity cost (there is no possiblity of capital gains or losses). Not your keys not your coins. Thing is it's all about levels of risk and what you are comfortable with in the end as well as your goals. Just remember nothing is risk free. Even holding your own keys is not risk free, there are roughly 4million inaccessible coins to prove that. *Above prices are taken from Deribit. |
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Now 20% with no risks and a perfect hedge? ELI5
I think explaining anything to you is not a good use of my time, however, that is an investment that you might be more interested in as it is perfectly suited to those who hold fiat, rather than bitcoin, and don't want to expose themselves to the risk of capital gains or losses. |
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If you do this with the whole stash, then you better use even more advanced strategies using futures, etc.
planbB (or preston pysh?) is saying that hedgies are on the hook for 1.5 bil already selling futures and buying same amount of spot btc, of vice versa, I don't recall.
Apparently, it is 20% yearly return with practically no risk. It is caused by a significant contango in btc futures..
The futures strategy is no risk because it is a perfect hedge. Easily done through CBOE and CME as well. If anyone has a bunch of fiat not doing anything that they want to generate a yield on, this is a great strategy. |
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These people who sell are always a step ahead. After 8 years of hodling I was ready to sell my first small amount BTC (not the one I bought Oct 2020) at $59444. And they knew many people will sell at 59k ish so they started the sell off at 57k  Now I will rethink if I sell below $99k  How about don't sell at all. At these price levels, there are ways to make an income of 10s of thousands USD a month on your exsisting stash without selling. This applies to stashes under 10 BTC too. Life is good at these levels. Fuck third-party custody, if you are considering or enticed by anything that involves that. There are some concepts in bitcoin.. the real deal bitcoin, that incentives are built in, so bitcoin is already designed to increase in value.. .what the fuck more do you need, you greedy fucks (#nohomo) who may well be seriously considering placing your coins with some stupid-ass service trying to claim legitimacy and enticing you with supposed "passive income" .. blah blah blah.. Did I say, "fuck that?" Don't be fucking trying to short-cut your BTC accumulation goals by thinking that you can "make money" using convoluted (surprise terms) contracts when if you accumulate adequately, then you will have way more options just living off the likely ongoing BTC price appreciation that has no real signs of stopping, even though it it is likely to continue to have up and down cycles along the way.. and you can take advantage of that in your long term planning and your refusal to take stupid-ass shortcuts that may well end up screwing you out of your coins by hook or by crook or just by bad luck (such as great price moves that liquidate you out of your supposed collateral that you were not able to adequately cover because you were to fucking busy gambling out of greed). You will thank me later, even if you might not be able to measure what you are thanking me for, exactly...  The thing you fail to grasp is that by selling covered call options to fund my lifestyle and purchases I will not be reducing my stack, In fact it will even help me accumulate more then I could before. What's more, I don't have to risk keeping my BTC on the exchange to still have it fully cover my calls. I can use margin so that those coins are kept in my own wallet (not the exchange). A little diversification is not a bad thing, especially when you don't have to sell BTC from your stack to do it. I think the trouble some of you have with this may be a lack of understanding/experience with derivatives in general. I can get almost 10% per month with covered calls, and my counter-party exchange risk is reduced by using margin. Yes its slightly risky, yes you might miss out on some capital gains, but in the long term it will do pretty fucking well. I’ve done covered calls among other options strategies for years in the legacy markets and I can tell you right now these premiums are amazing in comparision. Thank you? your kidding right? If I had listened to you my stack would have been reduced substantially with your constant insistence of selling BTC on the way up. Now that's a stupid strategy. I can assure you my stack will be much larger at 200k then it is now. The only people to thank around here are the ones that tell you to never sell any of your BTC, unless there is an emergency. Let me help you, and others that might consider listening to you, out. First let me introduce Exhibit A - https://en.bitcoin.it/wiki/Mt._Gox https://en.bitcoin.it/wiki/BTC-e etc etc etc... and read up on exit scams. Oh you want to hedge your counter party risk by running on a margin? That's cute, let me introduce Exhibit B https://en.wikipedia.org/wiki/Flash_crash oh you claim to make 120%/yr? this brings me to Exhibit C https://bitcointalk.org/index.php?topic=50822.0 & https://en.wikipedia.org/wiki/BitconnectLooking at Deribit, in order to get 10% premium for March 26 calls you need to sell at $60k strike, meaning that if in 1 month BTC goes up by anything over 7% you'll loose some of your BTC (or as you claim "miss out on some capital gains"). Now you just have to do it consistently every month, and hope Deribit doesn't go the way of Gox. Currently the golden standard seems to be BlockFi that pays just 3%/yr (above BTC2.5) https://blockfi.com/rates/ if you believe you can get considerably more (like 117% more) without taking on additional risk, i got a bridge to sell you Look, there are many different investing strategies, some may be right for you and others not. For me, I no longer want to sell any of my stash (Like you and many others here do), but I would also like to retire, right now. Covered calls is how I can retire and it is a legitimate strategy that has been done for decades in markets of all types. It produces income, and sometimes, some capital gains. I'm prepared to let the other 99% of assets to go for only capital gains while 1% is dedicated to income. I also want a way to generate an income in a downwards market (BTC does this sometimes), this strategy allows it. I really can't understand the hatred that my strategy seems to generate in you and others. I am now more of a hodler than most people because of it, and I always assumed that is what we liked to do around here. Hodl as many coins as possible and for as long as possible. Yes there is risk, I guess I'm just not as risk adverse as you and others here are. |
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I can assure you that if Bitcoin goes to $500k this year, your stack will be smaller than it is today. And you will be left trying to buy back $500k Bitcoins with $200k (or $203.5k if you count the premium).
Yes you can win 9/10 but when you lose, you lose big.
Writing insurance against the Bitcoin price going up in the biggest bull market the world has ever seen is a shitty idea.
Yes, 'if' that happens I might have one less BTC, however, I will still be able to generate an income all the way up and down from it. But, if I don't generate an income in the fashion I am, I will definitely have less BTC then I do now, because I will have to sell more than one to 'lock in profits' and it is unlikely that I am lucky enough to sell at the exact top. So, basically it is I might have 1 less BTC + plus an income the whole time (including in a down market), vs, I will definitely have one less BTC (most likely more because I won't time the top perfectly) and a stack of dirty fiat devaluing every day that I use to fund my lifestyle until it runs out. |
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Convoluted contracts. What are you talking about? blockfi? that is not optimal, sure, I would never give Zack my btc.
However, selling covered calls is a very well known financial technique that involves NO lending and, frankly, is VASTLY advantageous to the outright selling since you are not selling anything at ALL, UNLESS the price is above whatever the value is, chosen by yourself and nobody else. Covered calls assume that you write them against whatever bitcoin you sent to the broker, they are not "naked", therefore "were not able to adequately cover" is not possible and just shows that you need to research this topic more.
Of course it s not better than hodling, but it is superior to repetitive selling up or down, skimming small amounts (or not small, whatever) that you advocate.
Selling covered calls is actually a perfect trade for mined coins since you can lock in value without a sale or assuming a sale at MUCH higher levels if you chose to do it.
If you are lucky, then you retain your btc and if not, you still sold btc at a higher to much higher price (depending on your chosen price for the contract: 75, 100, 200K).
Hoverver, if btc is not sold in the end, you generate income and not cap. gains-maybe it matters for some.
Spot on. JJG, this one seems to be beyond your ability of understanding or comfort level. Just stick to selling your stack as the price goes up. I and others wish to maintain our current stack or increase it. |
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These people who sell are always a step ahead. After 8 years of hodling I was ready to sell my first small amount BTC (not the one I bought Oct 2020) at $59444. And they knew many people will sell at 59k ish so they started the sell off at 57k Now I will rethink if I sell below $99k How about don't sell at all. At these price levels, there are ways to make an income of 10s of thousands USD a month on your exsisting stash without selling. This applies to stashes under 10 BTC too. Life is good at these levels. Fuck third-party custody, if you are considering or enticed by anything that involves that. There are some concepts in bitcoin.. the real deal bitcoin, that incentives are built in, so bitcoin is already designed to increase in value.. .what the fuck more do you need, you greedy fucks (#nohomo) who may well be seriously considering placing your coins with some stupid-ass service trying to claim legitimacy and enticing you with supposed "passive income" .. blah blah blah.. Did I say, "fuck that?" Don't be fucking trying to short-cut your BTC accumulation goals by thinking that you can "make money" using convoluted (surprise terms) contracts when if you accumulate adequately, then you will have way more options just living off the likely ongoing BTC price appreciation that has no real signs of stopping, even though it it is likely to continue to have up and down cycles along the way.. and you can take advantage of that in your long term planning and your refusal to take stupid-ass shortcuts that may well end up screwing you out of your coins by hook or by crook or just by bad luck (such as great price moves that liquidate you out of your supposed collateral that you were not able to adequately cover because you were to fucking busy gambling out of greed). You will thank me later, even if you might not be able to measure what you are thanking me for, exactly... The thing you fail to grasp is that by selling covered call options to fund my lifestyle and purchases I will not be reducing my stack, In fact it will even help me accumulate more then I could before. What's more, I don't have to risk keeping my BTC on the exchange to still have it fully cover my calls. I can use margin so that those coins are kept in my own wallet (not the exchange). A little diversification is not a bad thing, especially when you don't have to sell BTC from your stack to do it. I think the trouble some of you have with this may be a lack of understanding/experience with derivatives in general. I can get almost 10% per month with covered calls, and my counter-party exchange risk is reduced by using margin. Yes its slightly risky, yes you might miss out on some capital gains, but in the long term it will do pretty fucking well. I’ve done covered calls among other options strategies for years in the legacy markets and I can tell you right now these premiums are amazing in comparision. Thank you? your kidding right? If I had listened to you my stack would have been reduced substantially with your constant insistence of selling BTC on the way up. Now that's a stupid strategy. I can assure you my stack will be much larger at 200k then it is now. The only people to thank around here are the ones that tell you to never sell any of your BTC, unless there is an emergency. |
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For anyone considering selling covered calls, just keep in mind this could be a very expensive decision
There is an outside chance that Bitcoin could go to crazy number this year. A $3.5k payment for giving away all the upside on a $200k sale in December 21 may not be a very good deal at all. It’s only a good deal if you are happy selling at $200k no matter what. Because the price could be $500k at that time. In that scenario, you just lost $296.5k in value.
Yes this is the risk, one has to remember you are doing this for the income and will forgo, if necessary capital gains. However, your example is not the best. Right now you could earn 3.5k on an option with strike price of 60k that expires in 2 weeks (5th March). Or, 3.2k an an option with strike price of 72k that expires in a little of 4 weeks (25th March). These 2 I mention also offer capital gains if the price expires over the strike price. I would only sell one month options at most. |
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"Deficits don't matter." "A college education is the only way to make it in this world." "401Ks are the key to building retirement wealth." "Rates going to zero, or even negative, are not a problem." "Stocks can only go up." "We can keep printing money forever, we own the printing press." "Universal Basic Income will solve all of our problems." "Bitcoin is a tool for criminals and drug dealers, a fraud, a scam, baby-brains squared...and it's going to zero."  Don't forget the "trickle-down effect". That's why the wealth divide is getting better.... Oh wait! |
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3. Sell BTC covered calls
Hint: covered calls are a great way to sell you BTC, rather than the traditional sell at certain price point on normal exchange.
3. I like this. I imagine it is something like this: sell covered calls by posting btc collateral, and actually sell the btc at the strike price on expiry. Do you have any idea where that is possible? You are correct. Deribit and FTX, are 2 places that I know off the top of my head. And you don't have to always post a full BTC as collateral, you can use margin, but then run risk of margin call. There is of course the risk of a big price move in one month meaning you will miss out on a lot of capital appreciation. Of course: a little like selling too early. But you do get advance money in return, after all. No free lunch and all that. I'm going to check the exchanges you suggested to get a feel for the premiums. something like that. You can sell 75K bitcoin calls, collect premium. Then, if btc is lower than 75K at expiration, you keep BOTH your premium cash and your bitcoin, rinse and repeat. If it is higher that 75K, then somebody basically buys your bitcoin at exactly 75K (plus $ premium that you collected). The best thing, it is european style options (at least on ledger X, which is US-based), so your bitcoin would not be yanked from under you in the interim. Not so good-you need to qualify with above $5 mil to sell options at intermediate odd prices (like 57, etc.). Anybody who gets approved for the regular account could sell at 25, 50, 75K, now probably 100K as well. I was considering selling some calls when btc was at $42K, very happy so far that I didn't. EDIT: I checked and Dec 2021 75K calls have ~16K premium while 100K calls ~11K. Wow. You can sell Dec 31 2021 200K calls and collect 3.8K in premium (on the bid)-exactly the lowest price in 2020. The worst case scenario-you would sell at 200K plus 3.8K premium. Lazer eyes. Great post, Biodom. You're informative as usual. Thank you! BTW @somac., I've checked FTX and they only seem to deal in futures - not options. Or maybe I have to sign up to see that? FTX have the shitist UI ever (bit of an exaggeration). It took me a while to work out where their options were too, and they don't display an options chain either, you have to request a quote. Works well though, however, their premiums are a little lower. Here's a link. https://ftx.com/optionsAnd here's some more info on how the hell to get to that link and what the deal with finding the options prices are. https://bitcointalk.org/index.php?topic=5316872.msg56334351#msg56334351 |
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3. Sell BTC covered calls
Hint: covered calls are a great way to sell you BTC, rather than the traditional sell at certain price point on normal exchange.
3. I like this. I imagine it is something like this: sell covered calls by posting btc collateral, and actually sell the btc at the strike price on expiry. Do you have any idea where that is possible? You are correct. Deribit and FTX, are 2 places that I know off the top of my head. And you don't have to always post a full BTC as collateral, you can use margin, but then run risk of margin call. There is of course the risk of a big price move in one month meaning you will miss out on a lot of capital appreciation. Of course: a little like selling too early. But you do get advance money in return, after all. No free lunch and all that. I'm going to check the exchanges you suggested to get a feel for the premiums. Good luck with it. |
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I was given a few options on twitter for places where you can get loans of fiat for BTC collateral.
Closest I've seen is Hodl Hodl saying they would lend stablecoins and "Blockfi gives usd loans using btc as collateral".
Both things I will look into when going to buy property.
Yeah that is another way to do things. Taxes are lower on loans too, interest rates vs whatever capital/income taxes are in your location. The loan will also be insignificant after another 4 years of BTC price rises. |
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How about elaborating on that a little more, somac.? ELI5... Ways to make an income from your current stash: 1. Lend your coins. celsius.network etc 2. Sell BTC futures 3. Sell BTC covered calls Take your pick on which works best. And yes for some of those things you may have to deliver but, you are in it for the income, just buy the BTC back, even if it is at a higher a price, rinse and repeat. Hint: covered calls are a great way to sell you BTC, rather than the traditional sell at certain price point on normal exchange. 1. Lending makes me very nervous. The counterparty risk won't let me sleep easily. My precioussss!! The good side is, it is unlike selling because you don't forfait your btc, but cash in interest - that's how it works, right? 2. Sell futures for cash seems a little more acceptable. It is tantamount to selling, though. 3. I like this. I imagine it is something like this: sell covered calls by posting btc collateral, and actually sell the btc at the strike price on expiry. Do you have any idea where that is possible? You are correct. Deribit and FTX, are 2 places that I know off the top of my head. And you don't have to always post a full BTC as collateral, you can use margin, but then run risk of margin call. There is of course the risk of a big price move in one month meaning you will miss out on a lot of capital appreciation. Any guesses on how long it is until there's something close to an FDIC insured account that'll generate some interest? All those options exceed my risk tolerance, but I am all about the never having to cash out / live off the interest lifestyle, if it can be swung. No idea, but maybe in 4 years time BTC will be so highly valued that these options become doable for you. |
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Hero status fully deserved, somac.
Ha, I didn't notice. Thank you everyone and in particular The Dude. |
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How about elaborating on that a little more, somac.? ELI5... Ways to make an income from your current stash: 1. Lend your coins. celsius.network etc 2. Sell BTC futures 3. Sell BTC covered calls Take your pick on which works best. And yes for some of those things you may have to deliver but, you are in it for the income, just buy the BTC back, even if it is at a higher a price, rinse and repeat. Hint: covered calls are a great way to sell you BTC, rather than the traditional sell at certain price point on normal exchange. 1. Lending makes me very nervous. The counterparty risk won't let me sleep easily. My precioussss!! The good side is, it is unlike selling because you don't forfait your btc, but cash in interest - that's how it works, right? 2. Sell futures for cash seems a little more acceptable. It is tantamount to selling, though. 3. I like this. I imagine it is something like this: sell covered calls by posting btc collateral, and actually sell the btc at the strike price on expiry. Do you have any idea where that is possible? You are correct. Deribit and FTX, are 2 places that I know off the top of my head. And you don't have to always post a full BTC as collateral, you can use margin, but then run risk of margin call. There is of course the risk of a big price move in one month meaning you will miss out on a lot of capital appreciation. |
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