Crypto exchange Deribit's bitcoin volatility index, DVOL, a measure of how much market participants believe prices will move over the next 30 days, has surged.
The greater the volatility, the higher the option premium. Thus, elevated implied volatility often has savvy investors 'overwrite' or sell call options to generate additional income on top of their spot market holdings.
If the underlying asset's price exceeds the strike price, the investor must sell the stock while still pocketing the premium received for selling the call.
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