Treasuries

Treasuries managing protocol-native tokens or stablecoins can deploy options strategies to enhance capital efficiency.

1️⃣ Covered Calls on Treasury Tokens

Treasuries can generate instant stablecoin income by writing covered calls on idle treasury tokens. This strategy allows them to: ✅ Earn upfront stablecoin premiums ✅ Retain control over tokens unless market conditions justify a sale ✅ Align value realization with favorable price movements

Example:

📌 A $10M WLD covered call with:

• 30-day expiry

• 110% strike price

• $200K upfront premium received

🔹 Outcome Scenarios:

• If WLD remains below the strike price → Treasury keeps WLD tokens, and the option expires worthless (out-of-the-money).

• If WLD surpasses the 110% strike price → Treasury sells WLD for $11M in USDC (in-the-money).

🔹 Key Benefit: Treasuries monetize idle holdings while retaining control in sideways or falling markets.

2️⃣ Cash-Secured Puts for Token Buybacks

Treasuries holding USDC (or yield-bearing stablecoins) can sell cash-secured puts to execute cost-efficient buyback programs.

Example:

📌 A treasury wants to buy back tokens using $500K USDC if the price drops more than 10% in the next 30 days.

🔹 Outcome Scenarios:

• Treasury receives a $13,700 premium upfront.

• If the token’s price does not drop >10% → Treasury keeps its USDC and pocketed the premium.

• If the token’s price falls below the strike → Treasury buys tokens at the pre-agreed price.

🔹 Capital Efficiency Boost: Using yield-bearing stablecoins as collateral enables treasuries to earn both stablecoin yield and option premiums simultaneously.