Options Classroom — What does selling a Call in a Bull Market mean, and what will be the outcome!

Assuming you bought 1 bitcoin:native spot at 59,000 dollars.

Now BTC has rebounded to 63,000 dollars.

The unrealized profit is: 63,000 - 59,000 = 4,000 dollars.

At this point, selling a BTC call with a strike price of 64,000 dollars and a two-day expiration gives an annualized yield of approximately 81%.

This 81% annualized converted into actual premium:

64,000 × 81% × 2 / 365 ≈ 284 dollars

If BTC expires below 64,000 dollars, this call becomes worthless, and you keep the full 280 dollars premium.

Then you actually have one Bitcoin + 280 dollars.

If BTC's expiration price is above 64,000 dollars (let's say it reaches 66,000 dollars), then the sold 64,000 dollar call would be exercised. (Typically, the trade will be executed above the strike price.)

Spot profit: 66,000 - 59,000 = 7,000 dollars (actual profit)

Loss from selling the call: 66,000 - 64,000 = -2,000 dollars (actual loss)

Premium income: +280 dollars (actual profit)

Total profit: 7,000 - 2,000 + 280 = 5,280 dollars

So it can be understood that if the price exceeds the selling price (64,000 dollars), no matter what the final price of BTC is, the profit remains approximately the same. This indicates that after exceeding the selling price, how much Bitcoin increases has nothing to do with the seller.

Therefore, selling a Call means sacrificing profits above the selling price by accepting premium upfront, which is not suitable for use in a bull market.

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