Charm
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Charm

Why Hodl when you can Yiedl™ ?

Summary

  • You can use your holdings to sell covered call options, and earn yields.
  • Charm.fi has the largest selection of covered calls in Defi.
  • The yields are safer, the closer it is to settlement date.
  • If you hold ETH or WBTC and believe the market price will not increase too much on settlement date, you can earn yields in ETH or WBTC by purchasing a ‘Sell Call’ at Charm.fi.
  • If you hold USDC and believe the market price of ETH or WBTC will not decrease too much on settlement date, you can earn yields in USDC by purchasing a ‘Sell Put’ at Charm.fi.

Introduction

What are covered calls?

To create a covered call using the underlying asset (eg WBTC), a holder will 1. Buy or deposit the underlying asset (eg WBTC), 2. Write a call option on that asset, and 3. receive the premium from writing the option. The outcome is the payoff profile in 4. Covered Call Payoff. The covered call holder will receive the premium as a yield, but will miss out on any gains if the price of the underlying increases above the strike price.

What are ‘Sell Calls’

What are ‘Sell Puts’

How can I capture the highest possible yield

To earn a yield, you can:

  1. Monitor the market price of the underlying (eg WBTC, ETH).
  2. If you believe the market price will not decrease significantly below a strike price, purchase a ‘Sell Put’ at that strike price. Please also keep an eye on the yield in the yellow box, which indicates your maximum yield.
  3. If you believe the market price will not increase significantly above a strike price, purchase a ‘Sell Call’ at that strike price. Please also keep an eye on the yield in the yellow box, which indicates your maximum yield.

Conclusion

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