Ep 118: TerraM Fund Reports Record –40% Weekly Loss as Drawdown Reaches –70%
| Weekly updates | 8 seen
As of November 21, 2025, the TerraM Multi-Asset Crypto Options Fund is down –40.00% week-over-week, marking our worst weekly result to date. The overall drawdown has deepened to –70.35%, placing the fund firmly in distressed territory. The crypto bear market has hit us hard, and leverage remains the primary problem. Core positions are still intact, but another week of similar magnitude could put us at serious risk without additional external capital.
Last week’s outlook turned out correct: BTC slipped toward the previously noted $84,000 level. While we’re not issuing price predictions, a short-term bounce — potentially a long-anticipated Santa rally — is still possible. Conversely, a push down toward $75,000 cannot be dismissed. Technical patterns typically revert, making a recovery toward the $95,000 area plausible, though far from guaranteed.
Bitcoin is clearly oversold. It’s trading below both its 50- and 200-day moving averages, and a death cross has already occurred. The RSI is deep in oversold territory. A further decline is still possible, but from a technical standpoint, a bounce (even if short-lived) is likely.
The central issue remains leverage. Without it, the portfolio would absorb volatility more gradually. With it, losses accelerate — a dynamic perfectly captured by Buffett’s line: markets climb the stairs but take the elevator down. That’s an accurate description of the past few weeks.
Options Income
We sell weekly options every Friday, which is why this update is published at the end of the week.
This week, the TerraM Multi-Asset Fund generated $102 in options premiums, what is impressive 2.9% weekly return on capital.
For the sake of transparency, the options income comes with certain trade-offs. We sold covered calls below our break-even levels. This means that if the market experiences a strong rally, we may forgo part of the upside potential.
Trades and Adjustments (USDT Settled / Weekly)
- 1.29 ETH – Break-even: $4,069 | Long calls: $2,900 (0.59), $3,800 (0.2) $4,200 (0.4) | Short put: $3,800 (0.1)
- 13 SOL – Break-even: $201.71 | Long calls: $145
- 0.02 BTC – Break-even: $112,250 | Long calls: $92,000
Solana Covered Call Growth Fund
Our open-ended Solana Covered Call Growth Fund also followed downtrend, but not as massive, declining by just -4.7%, with the NAV per unit now at $0.73. The fund operates without leverage, so the drawdown poses no structural risk — we simply ride out the market move. Additionally we are already holding 31.18 SOL with break even price $178.9
Options selling generated $31 this week all reinvested into spot SOL
TerraM token
our native TerraM token also was not an exception and dropped it value to $2.87
The Bottom Line
The fund suffered its steepest weekly decline on record, with a –40% drop and an overall –70.35% drawdown, driven primarily by leverage exposure during a deepening crypto bear market. Core positions remain intact, but another similar shock could become critical without fresh capital. BTC moved as expected toward $84,000, and while a bounce or seasonal rally is possible, further downside toward $75,000 cannot be ruled out. Technical mean reversion suggests a potential recovery toward $95,000, but uncertainty remains high.
If you’d like to follow our weekly updates on fund performance, market analysis, and development progress, you can subscribe to our newsletter.
This report is for informational and educational purposes only and does not constitute financial advice or an invitation to invest.
ETH Short Put Optimization: Margin Reduction and Strike Improvement
| Crypto Options | 11 seen
As of November 18, 2025 our options portfolio carried 2.9 ETH short puts across multiple expiries. If all positions were assigned at their respective strike prices, the total capital required would be $9,040. Most of these contracts have recently moved in-the-money, largely due to the broad market selloff that pushed ETH lower and increased short-term margin pressure.
Given these conditions, we performed a structured review of our risk-limit scenarios. The goal was straightforward:
avoid any potential margin call while maintaining long-term bullish exposure to Ethereum.
We remain comfortable holding ETH long-term, but short-term volatility is the primary threat we aim to neutralize.
During the review, we identified a tactical opportunity that allowed us to reduce both margin requirements and strike-price exposure without sacrificing premium income. The key steps:
Buying Back Risky Short Puts
We repurchased 0.3 ETH worth of short puts with a strike of $3,200, paying $71 in total. These contracts contributed disproportionately to near-term assignment and margin risk due to their higher strike.
Selling Two New Short Puts (Further Out)
Immediately after closing the 0.3 ETH, we opened two new short put contracts with a later expiry date.
Premium collected: $74
This generated slightly more cash than we spent buying back the earlier contracts — a small net credit.
But the real benefit came from the structural improvements. Our total exposure dropped from:
- 2.9 ETH → 2.8 ETH
A small but meaningful reduction in potential assignment and margin requirements.
The new puts were sold at a strike of $2,800, a $400 reduction from the previous $3,200 level.
Lower strike = lower assignment risk + lower capital needed per ETH.
Margin Requirement Reduced
If all positions were assigned today:
- Before: $9,040 required
- After: $8,640 required
Total reduction: $400 in obligations
This difference may look minor, but in a tightly leveraged environment, every improvement strengthens liquidity and resilience.
The new options expire further out in March, giving the portfolio additional time to recover from current volatility — with significantly lower short-term pressure.
This adjustment simultaneously:
- Reduced total ETH exposure
- Lowered the strike price
- Decreased potential assignment cost
- Preserved premium income
- Extended time before next major expiry
- Reduced short-term margin risk
A classic example of small adjustments producing disproportionately strong risk benefits. With more time before our next expiry window, we can continue refining the portfolio step-by-step. The broad objective remains unchanged:
Gradually eliminate margin debt, return to a cash-growth trajectory, and rebuild diversified exposure once volatility stabilizes.
Ep 117: Bitcoin Death Cross Worries Grow as TerraM Fund Drops Further
| Weekly updates | 42 seen
As of November 14, 2025, the value of the TerraM Multi-Asset Crypto Options Fund has declined by another -11.97%. Our drawdown has reached a new low of –50.58% in just a few weeks — a striking reminder of how quickly conditions can deteriorate. Even though most indicators are washed out and a recovery could be near, we remain cautious and do not rule out further downside. We still hope to be wrong.
There is one major event worrying us: a death cross on the Bitcoin chart. In fact, it’s not just potential it’s looking increasingly inevitable.
A death cross occurs when the 50-day moving average falls below the 200-day moving average. This signal typically reflects a long-term shift from bullish to bearish momentum. Historically, it doesn’t always trigger an immediate selloff, but it often marks periods of extended weakness, slow recoveries, or deeper downside. The mechanics are simple: the faster-moving average (50-day) reacts quickly to recent price declines, while the slower one (200-day) represents the broader trend. When the short-term line crosses below the long-term line, it signals that recent price action has deteriorated enough to drag the overall trend down with it.
While markets can sometimes bottom shortly before or after a death cross, the pattern itself highlights deteriorating momentum and the risk of further drawdowns — exactly why it remains a key concern for us right now.
We’re not making price predictions, but a move toward 84,000 for Bitcoin seems increasingly plausible. Again, we hope we’re wrong.
Our open-ended Solana Covered Call Growth Fund also followed downtren, declining by another -5.04%, with the NAV per unit now at $0.77. Although Solana retraced more than 15%, the fund operates without leverage, so the drawdown poses no structural risk — we simply ride out the market move.
Our native TerraM token was without changes, thats encouraging, few bot traders and long term holders there.
Options Income
We sell weekly options every Friday, which is why this update is published at the end of the week.
This week, the TerraM Multi-Asset Fund generated $188 in options premiums, what is impressive 3.24% weekly return on capital.
For the sake of transparency, the higher options income comes with certain trade-offs. We sold covered calls below our break-even levels. This means that if the market experiences a strong rally, we may forgo part of the upside potential.
Trades and Adjustments (USDT Settled / Weekly)
- 1.29 ETH – Break-even: $4,113 | Long calls: $3,200 (0.69), $3,800 (0.2) $4,200 (0.4) | Short put: $3,800 (0.1)
- 13 SOL – Break-even: $203.93 | Long calls: $150
- 0.02 BTC – Break-even: $112,995 | Long calls: $101,500
Crypto Algo Trading and Machine Learning: Options Probability Bot
Last week we spent time writing Python code and building machine-learning–driven algo trading bots. It’s both fun and useful — it keeps us sharp while giving us an edge in understanding market behavior. We also launched our first fully functional 1DTE SOL trading bot. Functional doesn’t mean profitable, and that’s the part we’re working on now: extending the system with machine-learning models to identify higher-probability setups.
In parallel, we continued developing our options-trading signal engine, which we distribute through a separate newsletter.
Most importantly, we made solid progress fine-tuning our Options Probability AI Bot. It’s proving especially helpful for novice traders who are still learning how to assess risk and probability. Without further preamble, here are a few signals the bot picked up for last week’s expiry:
The options market remains unusually skewed toward elevated out-of-the-money premiums, especially on BTC covered calls and short ETH puts with just six days to expiry. This kind of pricing typically reflects a mix of high implied volatility and cautious positioning ahead of near-term catalysts. The distribution of strikes suggests traders are willing to sell upside risk while collecting modest returns on deeply OTM downside exposure.
If you’d like to follow our weekly updates on fund performance, market analysis, and development progress, you can subscribe to our newsletter.
This report is for informational and educational purposes only and does not constitute financial advice or an invitation to invest.
Crypto Options Prediction Bot — Inside Our Next-Gen AI Trading Engine
| Crypto Options | 27 seen
At Terramatris, we’ve spent years exploring the intersection of quantitative finance, machine learning, and blockchain markets.
Our latest internal project - Crypto Options Prediction Bot - represents a major leap in how AI can analyze and rank crypto options across Deribit in real time.
Unlike retail “signal” bots, our bot doesn’t guess. it learns, measures, and scores every BTC and ETH options contract based on statistical probabilities, expected returns, and volatility dynamics.
- Fetches live Deribit options data for BTC and ETH every week.
- Filters all contracts with Friday expiries — matching standard options cycles.
- Uses machine learning models to estimate:
- The probability an option expires out-of-the-money (P(OTM))
- Its expected return (%)
- Liquidity and volatility conditions
- Market regime indicators like implied-volatility rank
These inputs are combined into a composite scoring system that ranks the most statistically favorable opportunities — for both option sellers and buyers.
How It Works
The bot connects to the Deribit API, fetching full BTC and ETH options chains up to 365 days ahead. Raw data is processed and normalized - calculating spreads, deltas, implied volatility, and distance from the money. A custom scoring algorithm blends risk, reward, and liquidity to highlight the most promising contracts. Weekly results are stored locally building a historical dataset for future model retraining.
Our algo trading bot currently runs on our internal machines, air-gapped from external systems. It is not connected to exchanges or wallets, and does not execute trades -it simply produces data-driven insights for internal analysis.
Each Friday at 08:00 UTC, the bot automatically:
- Fetches new Deribit data
- Scores all contracts
- Saves the top results to an internal archive
The system helps our research team identify weekly patterns and optimize strategies — especially for covered calls and short puts.
Over the next few months, we will continue gathering and analyzing weekly data. Once sufficient history is built, we’ll begin internal testing for on-chain execution and closed-loop learning.
Public rollout isn’t planned before late 2026, as our focus remains accuracy, stability, and compliance.
We’re open to partnerships, research collaborations, and institutional pilot discussions. If you’re building in the crypto options or quantitative analytics space, let’s talk.
How to Repair a Deep-in-the-Money Covered Call in Crypto
| Crypto Options | 50 seen
Covered calls are among the most reliable tools for extracting yield in volatile markets. Still, when prices fall sharply, even disciplined positions face pressure. The decision then shifts from profit maximization to risk control and capital efficiency.
In this article, we’ll walk through practical ways to repair a broken covered call, especially when the underlying asset has crashed and the position is deep in the money.
At Terramatris, we primarily trade crypto options, so the examples focus on assets like Ethereum — but the same principles apply to traditional stock covered calls as well.
1. Rolling Down the Call
When the underlying declines, the short call’s value drops. Buying it back and reselling at a lower strike increases income but sacrifices potential upside if prices recover. It’s a quick income fix, not a long-term solution.
2. Ratio Rolling (Adding Lower Calls)
Selling an additional lower strike call can speed up premium recovery but doubles exposure if the market reverses. It’s a tactic that rewards precision timing and disciplined risk sizing.
3. Closing and Re-Entering via Short Puts
Closing the covered call and pivoting to short puts allows traders to maintain premium flow while resetting exposure lower. It’s often cleaner when volatility remains high and directional conviction is low.
At Terramatris, we operate under a simple principle: Income first, precision later.
We’re comfortable selling aggressive calls below breakeven to maintain premium inflow — but only when risk/reward justifies it. Our breakeven on ETH is roughly $4,250, and we’re currently evaluating selling short-term calls with $3,600–$3,800 strikes while the market stabilizes around $3,200–$3,300.
This approach acknowledges near-term downside risk while extracting yield from elevated implied volatility. If the market recovers and ETH closes above the strike:
- Assignment at $3,600–$3,800 would effectively realize a controlled loss versus our original $4,250 entry.
- From there, we’d re-enter exposure via short puts, likely around $3,000–$3,200, collecting premium while positioning to rebuild ownership at a better cost basis.
This keeps the capital working without forcing early exits or reactive hedges.
When ETH plunged from ~$4,100 to $3,200, our 1 ETH covered call was deep underwater relative to the initial entry. Rather than panic-selling, we analyzed the probability curve:
- At-the-money IV was above 80%, creating strong short premium opportunities.
- Selling 1-week calls around $3,600–$3,700 would yield roughly $38–$56 per contract, translating to a 1–1.5% return on notional for a single week.
That’s sufficient to reduce the effective cost basis toward $4,200 even if price drifts sideways. If assigned, the follow-up short put cycle continues the yield chain without margin strain.
We’ve long maintained that leverage is a double-edged sword. It amplifies gains in quiet markets but can destroy capital during volatility spikes.
As the Terramatris portfolio grows, our objective is clear:
- Keep leverage lower, ideally under 1.2× net exposure.
- Prioritize liquidity and optionality over absolute yield.
- Let compounded option income grow the portfolio organically, rather than force size with borrowed capital.
Reducing leverage allows us to survive drawdowns intact — which, in option writing, is the real competitive edge.
Covered call “repair” isn’t about recovering every lost dollar — it’s about managing premium flow and risk posture intelligently. At Terramatris, we remain patient. We’re evaluating short calls between $3,500–$3,600, not rushing to sell. If assignment occurs, we’ll pivot to short puts near $3,000–$3,200 to re-establish long exposure with lower basis and continued yield.
In volatile markets, survival and steady premium accumulation matter more than speed.
Solana Covered Call Growth Fund Performance - October 2025
| Funds | 30 seen
The Terramatris Solana Covered Calls Growth Fund completed its second full month of operations in October 2025. The Fund continued to follow its systematic covered call strategy on Solana (SOL), maintaining disciplined position management amid heightened crypto market volatility.
By the end of October, the Fund had 12,171 shares issued, bringing total Assets Under Management (AUM) to $10,831 based on a closing NAV of $0.89 per share. This represents a 95.6% increase in AUM from September’s level of $5,536.
Solana’s market price declined from $208 to $186 (-10.6%) over the month, while the Fund’s NAV decreased 4.3%, demonstrating relative resilience and approximately +6.3% outperformance versus the underlying asset.
The Fund remains open to new capital commitments until total AUM reaches $100,000. TerraM Fund, one of our core investors, continues biweekly contributions of $100, supporting consistent capital growth.
For full details on Fund activity, performance, and strategy outlook, please refer to the attached monthly report.
Poor Man’s Crypto Hedge Fund: Earning Income from Dogecoin Options on Bybit
| Crypto Options | 27 seen
After Bybit enabled options trading for Dogecoin (DOGE), we decided to include DOGE in the TerraM Multi-Asset Crypto Options Fund. Our favorite approach across assets remains consistent - selling put options to generate income and using that income to accumulate the underlying asset over time.
If assigned, we take delivery of the asset and sell covered calls. More often than not, we roll forward the position for a credit instead of letting the call get exercised, effectively compounding income while maintaining exposure.
On October 29, we opened our first DOGE position by selling:
- 1,000 DOGE put options
- Strike: $0.185
- Credit received: $0.019 per DOGE
- Expiry: October 31, 2025
By October 31, the strike was in the money, so we decided to take a proactive stance — rolling the position forward one week to the next expiry while lowering the strike price to $0.18 and earning an additional premium of $0.0058 per DOGE.
All collected premium is reinvested into spot DOGE, which is now part of our TerraM Multi-Asset fund.
- Spot DOGE holdings: 40 DOGE
- Short puts: 1,000 contracts (strike $0.18)
- Average buy price: $0.1895
- Break-even price: $0.1742
What happens next?
If, on expiry — November 7, 2025, DOGE remains above $0.18, our short put options will expire worthless, allowing us to keep the full premium and continue selling new weekly puts to generate consistent income.
If, however, DOGE trades below $0.18, we’ll evaluate two possible paths:
- Roll Out and Forward: Extend the position to a later expiry while keeping or slightly adjusting the strike price — ideally for an additional net credit, compounding the income stream.
- Take Assignment: Accept delivery, most likely in the form of a perpetual futures position, and transition to a covered call selling strategy to generate further yield.
This flexible approach allows us to adapt dynamically to market conditions while maintaining our primary goal — steady option income and strategic accumulation of DOGE within the TerraM Multi-Asset Crypto Options Fund.
After our first week with DOGE coin option we are looking at 3% income in 9 days
This marks the start of our “Poor Man’s Crypto Hedge Fund” series, where we’ll use DOGE as a fun and educational vehicle to demonstrate disciplined, option-based accumulation and yield generation in crypto markets.
As always, all DOGE income and positions are part of the TerraM Multi-Asset Crypto Options Fund, following the same risk-managed, income-compounding approach used with BTC, ETH, and SOL.
Why We Added MNT to Our Long-Term Investment Portfolio
| Investment ideas | 21 seen
At Terramatris, we’ve added a small position in Mantle (MNT) to our Multi-Asset Crypto Options Fund, following Bybit’s launch of MNT options. The move aligns perfectly with our focus on assets that support options trading — a key part of our long-term yield strategy.
We’re generally bullish on assets that we can build structured positions around — primarily BTC, ETH, and SOL — since these allow us to generate steady yield through systematic option selling. Seeing MNT appear on Bybit’s options chain was a bit unexpected, but it instantly put the project on our radar.
Mantle brings together a modular Ethereum Layer-2 design, a growing DeFi ecosystem, and now — importantly for us — derivative market access. That last point makes all the difference for an options-based strategy like ours.
We began by establishing a small position via put options, collecting premiums and using part of the earned premium to accumulate spot MNT for our long-term holdings. This approach lets us scale exposure gradually, with downside protection and steady income generation — consistent with how we’ve built other long-term crypto positions in the fund.
We’re not in the business of making short-term price predictions, but we did run a few internal simulations on potential valuation ranges. Seeing MNT in the $10–$20 price range appears much more realistic than $100. Still, we do enjoy a good moonshot, and if Mantle reaches triple digits someday, we’ll gladly ride that wave.
Alongside our options exposure, we’re also exploring DeFi opportunities for MNT staking within the Mantle ecosystem and beyond. Generating additional passive yield through on-chain protocols complements our options-based income, helping us compound returns while supporting ecosystem growth.
Our MNT position is modest but strategic. The introduction of options trading gives Mantle a new level of market maturity, and for Terramatris, that’s a clear signal to start paying attention. As always, we’ll continue to sell options, collect yield, and build spot exposure over time — one premium at a time.
Introducing Terramatris SMA — Expanding Opportunities in Tailored Crypto Management
| Crypto Options | 20 seen
At Terramatris, our journey has always been rooted in one clear goal — to grow capital through options trading. From day one, our focus has been on developing strategies that generate consistent, risk-adjusted returns in the ever-evolving crypto derivatives market.
In our early days, we briefly explored managing client portfolios through Separately Managed Accounts (SMAs). While that initiative never really took off at the time, it gave us valuable insights into the infrastructure, compliance, and communication needed to manage external capital effectively. Over the years, we instead found stronger growth in pooled asset management, developing scalable structures and robust strategies through our core vehicles — the TerraM Multi-Asset Crypto Options Fund, the Solana Covered Call Growth Fund, and our native TerraM token.
Now, with a mature foundation, proven execution systems, and increased client interest, we are pleased to offer Terramatris SMA — a fully personalized solution for investors who prefer direct account management while benefiting from our expertise in options-based yield generation.
SMA Offering Highlights
- Minimum Investment: $25,000
- Strategy Focus: Options-selling and volatility strategies on BTC, ETH, SOL, XRP, DOGE, and MNT
- Execution Platforms: We operate across leading derivatives and spot exchanges including Deribit, Bybit, Deriv, Gate.io, and Binance
- Flexible Structure: Accounts can be connected via API integration or managed through direct execution, depending on client preference
- Transparency and Control: Investors retain full ownership and real-time visibility over their capital, while Terramatris provides ongoing strategy management and reporting
Built in Partnership with Our Clients
Each SMA is managed in close collaboration with the client. From initial strategy design to live portfolio monitoring, we emphasize transparency, flexibility, and clear communication. This ensures that every trading decision reflects both market conditions and the investor’s specific objectives.
A Natural Step Forward
While our primary focus remains on growing the Terramatris ecosystem through our funds and native token, the SMA offering is a strategic expansion — a way to extend our proven trading framework to a select group of investors seeking tailored solutions.
At Terramatris, we see SMAs as a continuation of our mission: leveraging advanced options trading to grow capital efficiently, responsibly, and transparently — now with an individualized touch.
Bybit to Launch XRP Options — A New Opportunity Ahead
| Crypto Options | 37 seen
During our routine login to Bybit today, we noticed an exciting update: Bybit will be adding XRP options contracts starting October 21.
At this stage, there’s limited public information about contract specifications, such as lot size, expiry intervals, or margin terms. However, the announcement itself is noteworthy, especially considering XRP’s growing liquidity and Bybit’s increasing dominance in the crypto derivatives space.
Although the Terramatris Fund currently does not hold XRP directly, this development could influence our positioning in the near future. Bybit has long been one of our go-to platforms for options trading, and depending on the contract size and leverage terms, we may explore credit spreads or covered call strategies on XRP once the instruments become available.
Overall, this is a welcome addition to the crypto options landscape — and we’ll be watching closely how the market responds once trading opens on October 21.