The XRP cryptocurrency focused on payments culminated at $ 3.40 in January, but has since dropped by $ 2.40.
Despite this drop, the $ 5 purchase option remains the most favored bet on the drunkenness, offering a significant increase in buyers if the price exceeds this level. However, this does not necessarily indicate bullish positioning among traders.
At the time of the press, the $ 5 call is the most popular strike, with a notional open interest of $ 3.84 million – the highest among all XRP strikes in the exchange, according to the metrics of the data source. The notional open interest reflects the value in dollars of all active option contracts at any time. On Deribit, an optional contract represents an XRP.
“Most of them are covered calls,” said Lin Chen, business development leader in Deribit Asia, in an interview with Coindesk. This explains substantial accumulation in an open interest in these calls out of money (OTM).
The covered call strategy is to sell higher level OTM calls while holding the underlying asset – in this case, XRP. This approach allows traders to enter the premium for the sale or writing of the call while limiting the potential losses of an unexpected market rally.
This strategy not only generates additional return in addition to their participations, but is also popular in traditional markets as well as in Bitcoin and Ether trading.
