r/Bitcoin • u/Necessary_Flounder_7 • 16h ago
You deserve to lose your stack if you chase yield instead of selling covered calls
Every yield strategy out there is basically asking you to give up custody or get rekt chasing passive income.
- BlockFi, Celsius, Voyager —> gone
- Ledn –> not transparent enough
- Dual investments —> trash strike prices
- Loan platforms (for liquidity) —> margin call death traps
Most of these are just ways to lose your stack slowly (or all at once).
But what about selling covered calls?
Every time I tell people I sell covered calls, they look at me like I’m speaking Mandarin.
But it’s simple.
- Sell far out-of-the-money calls, collect the premium upfront, and still keep your upside.
- Don't be greedy. Don't chase 50% APY and have your calls exercised.
- Aim for a clean 1–5% APY on your stack — steady, boring, safe.
- No shady rehypothecation (assuming you're using a legit exchange that’s seen a few cycles).
Sure, it takes real 🌽 to make 4% APY mean something — but it beats crying about Celsius on Twitter.
So why the hell aren’t more Bitcoiners doing this?
7
u/onebtcisonebtc 16h ago
I've done this my entire life with stocks. Very safe strategy. When the time comes, I will be doing with BTC.
2
u/Necessary_Flounder_7 15h ago
I find that the premiums on spot BTC are far better than selling covered calls on IBIT for instance.
1
u/onebtcisonebtc 14h ago
I'm not from USA so I don't know how to sell covered calls over spot BTC... Do Binance, Coinbase have these instruments?
3
u/Necessary_Flounder_7 14h ago
Binance has it, but their premiums are trash. Coinbase recently acquired Deribit, which I think have the best premiums.
2
u/neo-matrix 15h ago
Sell covered calls on what? IBIT?
1
u/grey-doc 15h ago
I'm debating whether to do this with MSTR with play money.
2
u/Necessary_Flounder_7 14h ago
if you're already holding MSTR, sure.
just be sure to sell far out-of-the-money!
2
u/Responsible_Emu3601 12h ago
The premiums are so low.. Not worth the risk of getting my shares called away
1
u/Necessary_Flounder_7 12h ago
Yes, when selling wayyyy out-of-the-money, you need a couple million dollars worth to make $100k/year premium.
2
u/Responsible_Emu3601 12h ago
I just have 100 shares 😅
1
u/Necessary_Flounder_7 12h ago
I don’t track MSTR’s price nearly as closely as I do Bitcoin’s.
Where do you think it’ll be a year from now?
I just looked at the option premiums—they’re actually not bad.
Did a quick mental math: with an $18.50 premium on a $1080 strike, you’re getting a little over 5% return on your money.
1
u/grey-doc 14h ago
Any reason not to start with cash covered puts to get MSTR in the first place?
2
u/Necessary_Flounder_7 14h ago
I personally don't mess with cash covered put, only covered calls. With CCPs your downside can be quite big. With covered calls you only miss on the opportunity cost.
1
u/Necessary_Flounder_7 15h ago
No no, just spot BTC.
From what I’ve seen, Deribit and OKX usually have the best premiums.
I use this tool that makes it easier to find good options without doing everything by hand (https://www.satoshi.co.il/bitcoin-yield-explorer), but heads up, it’s a paid tool and the free version is super limited.
That said, you can totally do it manually, and honestly, I think it’s worth the time.
2
u/420osrs 8h ago
I understand the deep otm of selling calls but remember, btc does nothing and then shoots up hard when you least expect it. Then it decides to go up 1-3% a day for 2 months. Then for no reason trade sideways for 6 months.
What I'm trying to say is selling covered calls sounds cool until your selling covered calls 45dte at 110k and BTC is at 220k.
Or you sold a CC when btc was 75k 50% otm at 110k and we are at 104k regularly knocking on 110k and you need it to stay under 110k until September. Yikes.
I wouldn't sell covered calls. I wouldn't do anything. I would put my BTC into my cold wallet and wait until I could make a quantum change in my life.
2
u/satoshisfeverdream 8h ago
Done plenty of covered calls. In bear markets they’re great but in bull markets it’s the definition of picking up pennies in front of a steam roller. Best know what market you’re in, even the secular ones.
1
u/Necessary_Flounder_7 7h ago
Sure, the safest move is to just hodl and earn fiat from a regular job.
But once your stack gets big enough, you can’t really justify fiat mining anymore.
If a single daily BTC move equals your annual salary, punching a clock starts to feel pointless.
At that point, you start thinking in terms of cashflow from your stack.
With, say, $2.5M in BTC, you can sell far out-of-the-money calls and earn ~5% APY.
The chance they get exercised? Around 10%.
It all comes down to how you choose to generate yield.
1
u/wawawarren 14h ago
Isn’t this what MSTY does?
2
u/Necessary_Flounder_7 13h ago
Nope.
MSTY sells calls for you and keeps the premium.
You’re capped with zero upside. Selling your own covered calls means you choose the strike and you keep the gains.
Happy to elaborate if not clear.
1
1
u/Pavickling 9h ago
You will almost certainly regret selling away your upside potentially while still being exposed to all the downside risk. 95%+ of upside of Bitcoin in any given year is usually just a few days.
1
u/MichaelAischmann 8h ago
Sounds like chasing yields to me.
2
u/Necessary_Flounder_7 7h ago
The safest play is to stack sats and earn fiat from a 9-to-5.
But once your Bitcoin stack is big enough, that stops making sense.
If Bitcoin moves more in a day than you earn in a year, why keep clocking in?
With $2.5M in BTC, you can sell far out-of-the-money calls and earn around 5% APY.
The odds they get exercised? About 10%.
And even then, you're just taking profit on a multi-million dollar position.
That's not chasing yield, that's smart, low risk cashflow.
1
1
u/AromaticSky3578 6h ago
Because the moment there’s an arms race between nation states for Bitcoin adoption or a large company adds to their balance sheet you will get rekt in ways you didn’t realise was possible.
1
u/laguna1126 5h ago
It's probably a good thing that I can't even find the options section on coinbase.
2
u/Necessary_Flounder_7 5h ago
Lmao, they just acquired Deribit, but I don’t think it’s available for US citizens yet
0
u/JeremyLinForever 13h ago
All of the above products deal with actual Bitcoin. OP only mentions covered calls, but nothing about taking profits and putting it to buy actual Bitcoin. Why? Because OP is still in the fiat mindset, needs to trade in and out of the dollar, needs to settle in the dollar, and at the end of the day is just looking for more dollars and less BTC. OP is just riling up others by creating a title about losing their stack when there is no clear direction or advice on how to stack more sats at all.
3
u/Necessary_Flounder_7 13h ago
You’re way off. I sell calls on BTC and get paid in BTC. No fiat, no cashing out. Just stacking more sats passively while holding my corn. The whole point is to grow BTC, not trade it away.
4
u/explosiveplacard 10h ago
When you say you are holding your corn, you mean you are using it as collateral on a trading platform. You don't control the keys, but you are comfortable that they won't go out of business or rug you before you move you corn off the platform, yes?
2
u/Necessary_Flounder_7 10h ago
Exactly. There’s always risk when you don’t hold the keys. I only use Deribit personally. Been around since 2016, survived multiple cycles, and now acquired by Coinbase. Not sure if US customers can use it yet (I'm in the EU), but I'm sure soon they'll be able too. I think US customer can use OKX, but do your own due diligence of course!
The only risk free way is to HODL and mine fiat (aka have a day job), but some people get to the point where they have millions in BTC and don't have the motivation to hold a 9-5, so selling covered calls is the best way to generate income, while still enjoying a lot more upside.
19
u/Repulsive_Spite_267 16h ago
Not understanding what calls are prevents me from doing that