The cryptocurrency centered on XRP payments reached a maximum of $ 3.40 in January, but since then 30% has fallen to $ 2.40.
Despite this decrease, the purchase option of $ 5 remains the most favored commitment of Deribit, offering significant ascending potential for buyers if the price exceeds that level. However, this does not necessarily indicate a direct bullish positioning among merchants.
At the time of publication, the call of $ 5 is the most popular strike, with a notional open interest of $ 3.84 million, the highest among all XRP blows in the exchange, according to the metrics of the data data source. The notional open interest reflects the dollars value of all active options contracts at a given time. In Delibit, an option contract represents an XRP.
“Most of them are called covers,” said Lin Chen, head of Commercial Development of Asia of Deribit, in an interview with Coindesk. This explains substantial accumulation in open interest for these calls outside money (OTM).
The Cover Call Strategy involves selling upper level OTM calls while the underlying asset is maintained, in this case, XRP. This approach allows merchants to capture the premium of selling or writing the call while limiting the possible losses of an unexpected market rally.
This strategy not only generates additional performance in addition to its holdings, but is also popular in traditional markets, as well as in the Bitcoin and ether trade.
