Covered Calls

Why We're Abandoning Long/Short Trading for Ethereum Covered Calls

At the beginning of June, we reached a turning point.

Once again, we experienced a scenario that has hurt our portfolio several times over the years. We were holding profitable long positions while simultaneously opening additional short positions using borrowed funds. The idea was to hedge risk and generate returns from both sides of the market.

Instead, the market moved sharply against us.

As Ethereum fell toward $1,500, tail risk increased dramatically. Our long positions lost value, while our short positions also became problematic due to the structure and leverage…

How to Choose Strike Prices for Ethereum Covered Calls

Choosing the right strike price is one of the most important decisions when selling Ethereum covered calls.

A strike that is too close to the current market price may generate attractive premium income but significantly increase the probability of assignment. A strike that is too far away may preserve upside but generate very little premium.

There is no perfect strike price.

The best strike depends on your market outlook, portfolio objectives, risk tolerance, and whether your primary goal is income generation or maximizing long-term Ethereum exposure.

At Terramatris…

How to Generate Income With Ethereum Covered Calls

Most Ethereum investors rely on only two sources of return: price appreciation and staking rewards.

Covered calls introduce a third source of return: option premium.

By selling call options against Ethereum you already own, you can generate recurring income while maintaining long-term exposure to ETH. For investors who plan to hold Ethereum for years, covered calls can be a practical way to improve portfolio cash flow and potentially reduce the effective cost basis of their holdings.

At Terramatris, covered calls form an important part of our broader Ethereum options…

Small Portfolio, Big Percentage Gains: Lessons From an Early Crypto Options Account

On August 31, 2023, the Terramatris portfolio increased from just over $5 to $33.66 in one week.

On paper, that represented a gain of approximately 525.65%.

At first glance, that number looks extraordinary. In reality, the lesson was more nuanced. The gain was large in percentage terms because the starting portfolio value was extremely small. A relatively modest dollar increase can create an enormous percentage return when the base amount is tiny.

This early portfolio update remains useful because it highlights an important concept for new crypto and options traders:…