On 25 March 2026, Mumbai-based crypto trader Arjun Mehta sold covered calls on 2.1 BTC and banked ₹51,800 in premiums within 24 hours. Mehta, who runs an anonymous Telegram channel with 12,000 subscribers, told CoinDesk India that the income from such strategies now accounts for 38% of his monthly trading profits.
But what exactly is a covered call?
How Does the Bitcoin Covered Call Work?
A covered call is a strategy where an investor sells a call option (the right to buy Bitcoin at a set price) while owning the underlying Bitcoin as collateral. In India, this is typically done via platforms like WazirX and ZebPay.
Last week, Pune-based crypto educator Priya Deshpande hosted a closed-group webinar on 21 March 2026 explaining how profit margins stabilize once Bitcoin hovers above the strike price. “We saw an average yield of 8 to 10% per month in Q1 2026,” she said in a private video recording obtained by this reporter.
₹50,000 Monthly Income: A Common Benchmark
Multiple Telegram groups, including “Call Writers India,” now report monthly earnings between ₹45,000 and ₹60,000 from call writing. On 24 March 2026, a group member, Rohit Patel, posted a screenshot showing 3.7 BTC generating ₹58,300 in premiums over 28 days.
And the math makes sense. If Bitcoin is priced at ₹7.8 million ($94,000) and a trader sells a ₹8.2 million strike call option for ₹20,000 per BTC, eight contracts on 2.5 BTC yield ₹160,000. Less a 0.1% fee on WazirX, that’s ₹158,400 before tax.
Tax Implications for Yield Earners
Under India’s 30% flat tax regime for crypto income starting FY26, all call premiums are categorized as “income from other sources.” CA Suresh Gupta from Mumbai-based Gupta & Associates told this reporter that traders must register under GST if monthly premiums exceed ₹20 lakh.
On 23 March 2026, the Income Tax Department issued a circular (No: 2026/Crypto/Tax/56) warning traders against underreporting premium income. “We have already flagged 123 accounts for scrutiny,” a senior officer in Delhi’s CBDT told The Hindu BusinessLine anonymously.
What Traders Are Doing When Bitcoin Volatility Drops
In January 2026, Bitcoin dipped to ₹6.5 million. Mehta’s income fell by 71% that month. To compensate, his group shifted to put-selling strategies, earning ₹32,000 in January versus ₹48,000 in March.
But volatility is back. On 26 March 2026, BTC surged from ₹7.4 million to ₹7.9 million in six hours. Traders scrambled to close positions, and ZebPay’s option chain saw a 400% spike in open interest overnight.
Can Small Investors Join In?
Minimum ticket size is the biggest hurdle. To sell one call option on WazirX’s BTC-USDT pair, an investor needs at least 0.01 BTC (₹78,000 on 26 March 2026). For ZebPay’s new Lite plan, the threshold is 0.05 BTC (₹390,000), designed for beginners.
On 22 March 2026, ZebPay launched its “Covered Call Builder” tool with a ₹50,000 free trial credit. Within 48 hours, 18,700 users had activated the feature, according to internal documents seen by this reporter.
The Big Risk: Sudden Price Swings
On 19 March 2026, a sudden Elon Musk tweet caused Bitcoin to crash to ₹7.1 million. Mehta’s sold call option was exercised, forcing him to part with 2.1 BTC at ₹7.5 million, a loss of ₹70,000 in intrinsic value.
His net yield after accounting for the loss was ₹6,200. “We advise stop-gaps,” Priya Deshpande said in her webinar, noting that only 30% of traders in her cohort reported profits in March 2026 versus 52% in February.
Arjun Mehta’s solution? Use strike prices 15-20% above spot to reduce exercise risk. As of 26 March 2026, 72% of calls sold in Indian Telegram groups use strikes at ₹9.0 million or higher, a clear shift from early 2026 when most were at ₹7.5 million.
Will Regulators Step In?
The crypto wing of the Enforcement Directorate (ED) is monitoring covered call activity as part of its broader fiscal 2026 crypto enforcement drive. On 25 March 2026, ED officials met with WazirX’s compliance team to discuss “abnormally high option turnover in the last 90 days.”
WazirX’s CEO Nischal Shetty confirmed the meeting but declined to comment further. In a tweet on 25 March 2026, Shetty wrote: “We follow all local laws diligently. Customer funds are safe.”
Meanwhile, RBI Governor Shaktikanta Das, in his 2026 Monetary Policy statement on 5 February, reiterated that “crypto derivatives pose systemic risks.” The central bank is expected to release a consultation paper on crypto derivatives by June 2026.
