XRP’s $5 Call Options

Despite XRP’s price drop from $3.40 to $2.40, the $5 call option remains highly sought after on Deribit. Notably, this surge in interest doesn’t indicate a simple bullish stance amongst traders.

What You Should Know:

• The most popular option on Deribit is the $5 call, currently holding a notional open interest of $3.84 million. This makes it the leading bet among all XRP options.
• Most of these positions are likely covered calls rather than outright bullish bets, as stated by Lin Chen, head of Deribit’s Asia business development.

In a covered call strategy, traders sell out-of-the-money call options against owned XRP, gaining premium benefits while reducing potential losses from sudden market rallies.