Bitcoin options

Selling Covered Calls on Borrowed Bitcoin: Strategic Yield with Asymmetric Risk

On May 25, 2025, we executed a position that perfectly illustrates a niche but compelling setup in the crypto derivatives space. We:

Borrowed 0.01 BTC (worth $1,080 at the time),Posted 0.54 ETH as collateral (worth $1,350),And sold a cash-settled call option on 0.01 BTC with a strike price of $110,000,Collecting a premium of $17 with weekly expiry (May 30).

Let’s break down the rationale, benefits, risks, and variations of this strategy — and why, despite its synthetic nature, it can be a valuable tool in Terramatris' option yield strategies.

The Core Strategy

The basic idea is…