Payments-focused Cryptocurrency XRP topped at $ 3.40 in January, but has since dropped 30% to $ 2.40.

Despite this decline, the $ 5 option remains the most preferred bet on the dismissed, giving a significant upward potential for buyers if the price exceeds this level. However, this does not necessarily indicate a direct bullish positioning among the traders.

At the time of the press, the $ 5 call is the most popular strike with a nominal open interest rate of $ 3.84 million -the highest among all XRP strikes on the exchange, according to data source -derived metrics. Notional Open interest reflects the dollar value of all active options contracts at a given time. On dismissal, an option contract represents an XRP.

“Most of these are covered calls,” explained Lin Chen, Deribit’s Asia Business Development Head, in an interview with Coindesk. This explains the significant structure of open interest in these out-of-the-money (OTM) calls.

The covered call strategy involves selling OTM calls at a higher level, while keeping the underlying asset-in this case XRP. This approach allows traders to catch the prize from selling or writing the call while limiting potential losses from an unexpected market rally.

This strategy not only generates additional benefits on top of their inventory, but is also popular in traditional markets as well as in Bitcoin and Ether Trading.