Treasure Island

Covered Call Chests

The SOL Yield Booster chest executes an automated options selling strategy that earns yield every week by collecting premiums on covered calls.

What is a Covered Call strategy?

A covered call strategy sells a number of call options while holding the underlying asset. This means that you are giving up potential upside of an asset in exchange for an immediate premium.
The diagram below shows the difference between simply holding ETH and holding + selling a call option (covered call). Notice how as long as the price of ETH does not go beyond a selected strike price, the seller of the option earns a nice premium.
Payoff diagram for a covered call strategy (source:


While we select the strike price carefully so as to earn yield ~95% of the time. In times where the price skyrockets beyond the selected strike, stakers will lose out on potential upside, but their USD value should not decrease, since their SOL deposits also increase in value.