Japanese investment firm Metaplanet said it generated 23.9 Bitcoin ($1.4m) in premium income from selling 223 Bitcoin put options to QCP Capital, a Singapore-based digital asset trading firm.
The premium collected amounted to 0.1075 Bitcoin per contract, the company said in a statement Thursday.
Metaplanet stated that this deal allows it to capitalize on Bitcoin’s volatility, earning premium income while maintaining a fully cash-backed position. By selling 223 Bitcoin put options, Metaplanet is also positioned to increase its Bitcoin holdings if the market price falls below the $62,000 strike price at maturity.
*Metaplanet sells $BTC put options, earns 23.97 $BTC in premium income* pic.twitter.com/w8qO0fifr1
— Metaplanet Inc. (@Metaplanet_JP) October 3, 2024
“This strategy not only enhances the company’s Bitcoin reserves but also reinforces its balance sheet, aligning with our ongoing financial strategy to strengthen long-term Bitcoin exposure and improve the company’s financial position, supporting its path toward profitability,” it added.
A put option gives the buyer the right, but not the obligation, to sell a certain amount of Bitcoin at a set strike price before or on a specific expiration date.
If Bitcoin’s price drops below the strike price by expiration, the buyer will usually exercise this right. As a result, the seller of the put option must buy the Bitcoin from the holder at the agreed strike price.
This week, Metaplanet announced it had acquired an additional 107.9 Bitcoin, worth 1 billion yen ($7m). In total, Metaplanet has now accumulated 530.7 Bitcoin, valued at around 4.96 billion yen ($34m).
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