I sold covered calls on my Bitcoin ETF and the premiums paid my car payment for six months

I began selling covered calls on my IBIT shares in January 2026. The BlackRock Bitcoin Trust was trading at $34.20 per share and I owned 400 shares, approximately $13,680 worth of exposure. My financial advisor at the time told me it was too risky. He wanted me in an index fund. I did it anyway. The premiums were too good to ignore.

the setup that looked too easy

IBIT options began trading in early 2025 and by January 2026 the open interest on weekly calls had grown to the point where bid-ask spreads were tight enough for retail traders to participate without getting crushed. I sold one contract of the $36 strike call expiring January 24th for $1.40 per share. That was $140 in premium for a one-week gripping period. Annualized, that return was absurd. I had been parking cash in a high-yield savings account earning 4.2% APY and here I was looking at what looked like 40%+ on an annualized basis.

The strategy was simple. I owned 100 shares of IBIT per contract. If the stock stayed below the strike at expiration, I maintained the premium an did it again the next week. If it went above, my shares got called away at the strike price and I had to buy back in at market. The risk was capped on the downside cuz I already owned the shares. The upside risk was real though. If BTC ran, I would miss the move above my strike.

six months of income

From January thru June 2026 I wrote 26 covered call contracts on my 400 shares of IBIT. Some weeks I wrote four contracts, some weeks two, depending on how aggressive I wanted to be. Total premiums collected came to $2,340. That is not life-changing money, but it covered my auto loan refinance payment of $389 per month for six months straight. The capital gains tax treatment was favorable too. Since I held the underlying IBIT shares for more than a year, the premiums qualified for long-term capital gains treatment on my 2026 return, which meant a 15% rate rather of the 35% short-term rate I would have dropped on ordinary income.

the week BTC decided to move

On April 7th, 2026, Bitcoin was sitting at $67,200 an I had sold four contracts at the $70 strike expiring April 11th. The premium was $0.85 per share, $340 total. I read good about it. The strike was 4.2% out of the money with four days to expiration. Then April 8th unfolded. A large institutional buyer entered the market and pushed BTC from $67,200 to $74,800 in 36 hours. IBIT followed, jumping from $34.80 to $38.60. My $70 strike calls were deep in the money. My 400 shares got called away at $70 per share. I made money on the shares, netting a $2,280 capital gain since my average cost basis was $34.20. But if I had just held, those shares would have been worth $15,440 at the peak. I left $2,760 on the table.

what I learned about the trade-offs

The covered call strategy works best in flat or slightly declining markets. In a raging bull market, it caps your upside in exchange for income you do not honestly need if the asset is appreciating. For someone who needs cash flow, like a retiree who wants to supplement annuity income, it makes sense. For a 34-year-old with a long time horizon, it likely does not. I went back to just gripping IBIT after the April incident. The $2,340 in premiums was nice, but the $2,760 I left on the table still bothers me every time I check my portfolio.

why I might do it again

The one scenario where I would restart the strategy is if BTC entered another extended consolidation period like the one from May to November 2025 where it traded between $58,000 and $72,000 for six months. In that environment, covered calls print money cuz the underlying barely moves and you collect premium every week. But I would set my strikes further out of the money, mayb 8-10% rather of the 4-5% I was using. The premiums would be modest, mayb $0.40 to $0.60 per share rather of $0.85 to $1.40, but the probability of keeping my shares thru a rally would be much higher. I also weighed buying a HELOC against my house to increase my IBIT position so I could write more contracts, but that read like one layer of risk too many. One bet at a time. The covered call income was enough to pay bills without adding use on top of it.

the tax deduction I almost missed

One thing nobody mentions about covered calls is that if your shares get called away and you hafta buy back in at a higher price, the loss on the repurchase can offset other capital gains. When I snagged back 400 shares of IBIT at $38.60 in April after getting called away at $70, the $700 difference between my sale and repurchase was a wash sale for tax purposes. But the premium income was still taxed separately. My tax deduction for the year was actually larger than I anticipated because I had capital losses from a separate index fund position that I sold in March. The combination of covered call premiums, long-term capital gains on the called shares, and the offsetting losses from other positions made my 2026 tax situation more complicated than I wanted. I retained a CPA for the first time. She charged $480 and found $1,200 in deductions I would have missed. That was the single best ROI of any financial decision I made in 2026.

where the strategy sits in my portfolio now

I still own 400 shares of IBIT. I still believe in Bitcoin as a long-term asset. But the covered call overlay is on hold til the market gives me a reason to restart it. The premiums were real money that dropped real bills. The opportunity cost was also real. For now, Im collecting my high-yield savings interest at 4.2% and letting the BTC position ride without capping the upside. When volatility picks up and premiums expand, I will be back. But not at the expense of a 22% move I could have captured just by doing nothin. === the one number I keep replaying === $2,340 in premiums versus $2,760 in missed upside. The net loss was $420 over six months. Not catastrophic. But it taught me that income strategies have invisible costs that only show up when the market moves in your favor and you are contractually prevented from participating. I will not make that mistake again.