On January 20, I closed my contango trade with Bitcoin futures. It was supposed to be market neutral with small but steady returns, but I didn’t want to deal with too many complicated setups. I prefer directional trades—puts or calls—so I closed the short futures contract and kept the long perpetual contract with an average buy price of $102,500.
At the same time, I sold a covered call with 1 DTE. Ideally, I’d keep this position forever, but I have a feeling I’ll close it sooner, hopefully in profit.
I like the idea of holding a long perpetual contract and selling covered calls against it because it generates regular income and helps offset potential drawdowns. However, it’s not without risks. If the price moves sharply against my position, I could be forced to adjust or close the trade earlier than planned. Managing these trades requires constant monitoring, but I prefer this over complex hedging strategies.
Today, I also want to share my experience with selling covered calls on ETH. I’ve been using the same 1 DTE strategy. A few hours before expiry, it seemed safe to sell another call for tomorrow, so I did. Right after, the spot price jumped well above my strike price. Markets are volatile, and timing is everything.
One thing I’ve learned is that selling covered calls works well in stable conditions, but unexpected moves can happen anytime. It's a good reminder to always have a plan for rolling or adjusting positions when things don’t go as expected.
Takeaways:
- Keeping things simple works better for me.
- Contango trades are fine but not my thing.
- Selling covered calls needs more attention to volatility.
- Staying flexible is key.
- Timing matters—anticipating moves can be tricky but rewarding.
- Having an exit plan is crucial in volatile markets.
I’ll keep refining my approach and focusing on trades that make sense to me. Let me know if you’ve faced similar situations.