Managing Volatility with a Delta-Adjusted Covered Call Strategy
Bitcoin’s volatility creates dynamic opportunities for option traders, and I’ve adapted my IBIT covered call strategy to minimize risk while still earning premiums. By switching the strike price of my call from $71 to $73, I collected $1.00 in premium with a lower delta of 0.176, significantly reducing the chance of assignment.
Why Adjusting the Strike Price Matters
Initially, I sold calls at a $71 strike price, but after reassessing Bitcoin’s movement and IBIT’s price range, I opted for a $73 strike. This adjustment means I have a greater cushion for IBIT to rise without risking assignment, as the delta of 0.176 indicates only a 17.6% chance of the option finishing in the money.
The $1.00 premium I collected still adds meaningful income to my portfolio while lowering the probability of losing my shares. It’s a perfect balance between reward and risk management.
The Power of a Low-Delta Strategy
Lower-delta options typically provide smaller premiums but come with reduced risks of assignment. In this case, moving to the $73 strike price aligned better with my expectation that IBIT would stay below this level during the option’s lifespan. This strategy is especially useful in a high-volatility market like Bitcoin, where sharp price spikes are common.
Generating Steady Returns
By switching the strike price, I not only earned a solid $1.00 per share but also positioned myself to avoid unnecessary assignment. The flexibility to adjust strikes based on delta and market conditions allows me to capitalize on Bitcoin’s volatility while staying in control of my IBIT holdings.
This dynamic approach ensures consistent premiums with lower risk—an excellent way to generate steady income in an unpredictable market.@TigerTradingNotes @MillionaireTiger @TigerStars@Daily_Discussion $IBIT 20250228 73.0 CALL$
| Side | Price | Realized P&L |
|---|---|---|
| Sell Open | 1.01 | -10.89% Holding |
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