TechFlow reports, 10x Research recommends the "covered strangle" strategy—holding spot Bitcoin while selling out-of-the-money call and put options. The specific proposal is to hold spot Bitcoin and sell call options with a strike price of $100,000 (50% above the current market price) and put options with a strike price of $50,000, both expiring in December 2024.
Markus Thielen, founder of 10x Research, stated in the report: "Selling the call option yields a 11% return, while selling the put option yields 6%. This strategy provides either a 17% downside buffer or additional return, depending on Bitcoin's closing price in December."
This strategy is suitable for a bullish market with slow upward momentum, where implied volatility is low. Out-of-the-money options lose value as they approach expiration, generating profit for the seller.
However, the strategy carries high risk, especially if prices fall below $50,000. Fidelity noted, "Below the strike price, losses from both spot holdings and the put option will double."
