Definition

The "Options Yields" endpoint calculates yields for two widely-used options strategies designed for ETFs and crypto-related equities: the Covered Call and the Cash Secured Put. These strategies offer a way to generate income while managing exposure to the underlying asset.

• Covered Call: This strategy involves selling a call option while holding the underlying asset. The yield is calculated by comparing the proceeds from selling the call to the cost basis of the underlying asset. This approach allows investors to enhance returns when expecting minimal price movement in the underlying asset.
• Cash Secured Put: This strategy entails selling a put option while maintaining sufficient cash to purchase the underlying asset if the option is exercised. The yield is determined by the premium received from selling the put relative to the cash set aside, providing a potential income stream while preparing for a favorable entry into the underlying asset.

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Details

The "Options Yields" endpoint provides calculations for the yields of two options strategies:

Covered Call:

• Absolute Yield: Calculated by dividing the proceeds from selling the call option by the initial investment in the underlying ETF or equity.
• Annualized Yield: Derived by multiplying the Absolute Yield by a factor representing the number of minutes in a year (525,600) divided by the minutes remaining until the option expires.

Cash Secured Put:

• Absolute Yield: Determined by dividing the proceeds from selling the put option by the initial cash balance reserved to secure the position.
• Annualized Yield: Calculated by multiplying the Absolute Yield by a factor representing the number of minutes in a year (525,600) divided by the minutes left until the option

API Endpoints

/markets/derivatives/analytics/trades-flow/options-yields/tradfi

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Availability

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Frequently Asked Questions