Writing ETH put options

If you'd like to generate some additional income while waiting to buy ETH at a price below the current, writing ETH puts may be the strategy you're looking for.

Do you use limit orders to bid for ETH below the current price? After deciding that you are going to buy ETH, you can place a bid below the current market price, hoping for a dip in ETH price. This way, you would feel comfortable if you end up buying the ETH.

Rather than waiting for ETH to hit your target price, you might consider using options to collect money today for being willing to assume the obligation of buying ETH if it moves to the lower price that you choose. It may seem a little counter-intuitive, but you can use write ETH puts to buy ETH.

Example

Let’s assume ETH is currently trading for $208. You would like to buy 200 ETH if it drops to $200. You could place a limit order to buy 200 ETH at $200 and wait to see if you buy. Or, you could write 200 ETH puts with a $200 strike at $4 and collect $800 on your willingness to buy 200 ETH at $200.

By using this strategy, you can generate additional returns in your stablecoin holdings by collecting a premium for your willingness to be obligated to buy ETH at a price that is below the current price.