Quote from: arbitrage001 on August 01, 2014, 01:10:08 PM

Quote from: TwinWinNerD on August 01, 2014, 11:34:46 AM

Quote from: arbitrage001 on August 01, 2014, 05:51:13 AM

Quote from: TwinWinNerD on August 01, 2014, 01:47:09 AM

I am still very much open to writing call options (covered) for shorter terms (at max. 1 month). Just PM me or reply in the other thread and we can work something out.

(will probably only reply tomorrow though)

Covered call is same as naked put.

If you are trying to benefit from the interest portion, you can check out ICBIT on future contract.

As a bitcoin holder Naked short put is not the same as covered call.

Basically I would be levereging my losses when issuing short puts, while covered calls wouldn't influence my downside at all.

Observed from a "Zero asset" position, your argument obviously holds true, as the payoff of both should in theory be the same.

Additional, I think that people pay a way higher than fair premium for calls, but don't do that for puts. You can see that on bitfinex, where shorting is nearly cost free!

Creating a new position to cover your existing asset is synthetically equivalent to selling your entire bitcoin holding and then naked shorting same amount of put. Risk and profit will be identical, only difference is the commission and the spread of the option.

If you already have bitcoin, assuming the spread on call and put are identical, then selling call to make it a "covered call" strategy is of course cheaper than selling all your bitcoin then shorting some puts.

Shorting bitcoin itself is entire different thing. It costs little to short because everyone is expecting the price will go to the moon. That is also the reason why it is hard to make a market for option. No one will pay for put while anyone that is risk caution will not write naked call, the spread on each call and put will make it impossible for risk neutral strategy called "box".

Exaclty! Well said.

And about Icbit, you can kinda simulate options, but in the end only options work like options. That's why I'd prefer to issue Calls myself. I don't like futures really, but maybe I am on my own here Wink