What is it?
Portfolio Remuneration (Covered Release) is one of the strategies that Nox Bitcoin offers using the Bitcoin options market.
This strategy of simultaneously buying Bitcoin on the spot market and selling a Bitcoin CALL type option, pocketing a premium on the option sale. On the other hand, the option buyer receives the right to buy Bitcoin at a certain price (strike) at a future date (expiration).
If the call option is exercised by the buyer, its maximum gain will be the difference between the Bitcoin price and the price determined in the option (strike) plus the CALL sale premium. If the option is not exercised, you will have the premium received on the sale of the option and Bitcoin in your wallet at an average price lower than the market price.
It is indicated for those who have Bitcoin and is neutral in the short term regarding the price. This is one of the most used strategies in the traditional financial market and we are now making it available to Bitcoin investors.
How it works?
Suppose you bought 1 Bitcoin for $ 10,000. After the acquisition, an option will be sold that will give the buyer the right to buy Bitcoin for $ 14,000, and you will receive the prize from the sale of the option on its maturity on the future date.
When selling the call option, you will pocket a prize and will be required to sell 1 Bitcoin for $ 14,000 if the option buyer chooses to exercise their call right.
Now suppose the Bitcoin price is $ 16,000 on the due date. In that case, the buyer will exercise the option right and you will sell Bitcoin for $ 14,000 + the prize, pocketing 40% of profit + the prize. You will not enjoy the appreciation after $ 14,000.
On the other hand, imagine that the price of Bitcoin is $ 8,000 on the due date. On that occasion, the buyer will not exercise the purchase right, after all, he could acquire Bitcoin for $ 8,000 in the spot market instead of paying $ 14,000. As there is no exercise, you will pocket the prize and you will lose with the devaluation of Bitcoin, but your wallet will still be above the market due to the prize received.
Conditions and liquidity
Portfolio Remuneration is a structured product with Bitcoin options. Through it, the customer is able to leverage his gains and, at the same time, reduce the potential losses of a Bitcoin devaluation.
The minimum investment for Portfolio Remuneration is 0,1 BTC. This investment has no daily liquidity, and can only be redeemed after the maturity of the operation. There is no daily profitability. The contracting of Nox strategies is done by analyzing the investor profile.
We carry out a Bitcoin option sale (Call) when you hire Wallet Remuneration. With that you receive a Bitcoin prize on the sale of the option, which remunerates your portfolio and reduces losses in the event of a price drop.
If the price of Bitcoin falls, Portfolio Remuneration helps to mitigate the impacts of devaluation. Selling the call option will allow your portfolio to perform above the market.
Advantages and disadvantages
- Leverage your earnings
- Helps reduce losses should Bitcoin devalue
- Remunerates its portfolio if the market is consolidated
- Your portfolio performs above the market
- Has no daily liquidity
- There is a risk that the short option will be exercised, if this happens, your earnings will be limited
- If you exercise, you will lose a part of the Bitcoin bullish
Who is it for?
Portfolio remuneration is excellent for those who want make profitable the Bitcoin wallet taking a risk loss control.
This strategy is also suitable for those who are neutral or moderately optimistic about Bitcoin in the short term.