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ETH

Selling ETH Calls Without Holdings Can Lead to Negative ETH Balance at Expiry

If an individual sells ETH call options without holding ETH in their account to cover the potential obligation, it can lead to a negative ETH balance upon expiry. For instance, if the collateral was USDC, they might need to sell USD to cover the shortfall in ETH. This situation underscores the importance of maintaining sufficient coverage when selling options.
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AI Analysis

When selling ETH call options, the seller assumes the obligation to deliver ETH at the strike price if the option is exercised. If the seller does not hold enough ETH in their account to fulfill this ...

AI Recommendation

It is advisable for traders engaging in ETH options to hold sufficient ETH or equivalent collateral to cover their potential obligations. Proper risk management involves understanding the implications...

Disclaimer

The AI analysis and recommendations provided are for informational purposes only. Any investment decisions should be made at your own risk. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions.

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