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Japanese investment firm Metaplanet reported that it earned 23.9 Bitcoin ($1.4m) in premium revenue from the sale of 223 Bitcoin put options to QCP Capital, a digital asset trading firm based in Singapore.
The premium received was noted to be 0.1075 Bitcoin per contract, as stated by the company in a Thursday announcement.
Metaplanet indicated that this transaction enables it to take advantage of Bitcoin’s price fluctuations, generating premium revenue while retaining a fully cash-backed position. By selling 223 Bitcoin put options, Metaplanet is also positioned to expand its Bitcoin holdings if the market price drops below the $62,000 strike price at expiration.
*Metaplanet sells $BTC put options, earns 23.97 $BTC in premium income* pic.twitter.com/w8qO0fifr1
— Metaplanet Inc. (@Metaplanet_JP) October 3, 2024
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“This approach not only boosts the company’s Bitcoin reserves but also strengthens its balance sheet, in line with our ongoing financial strategy to enhance long-term Bitcoin exposure and improve the company’s financial standing, aiding its journey toward profitability,” it further stated.
A put option grants the purchaser the right, but not the obligation, to sell a specified amount of Bitcoin at a predetermined strike price before or on a designated expiration date.
If Bitcoin’s price falls below the strike price by the expiration date, the buyer typically exercises this right. Consequently, the seller of the put option is required to purchase the Bitcoin from the holder at the agreed strike price.
This week, Metaplanet disclosed that it had acquired an additional 107.9 Bitcoin, valued at 1 billion yen ($7m). In total, Metaplanet has now amassed 530.7 Bitcoin, estimated at approximately 4.96 billion yen ($34m).
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