Covered Gain is a dual investment product that lets you earn high interest income before you successfully sell crypto at your target price. The APY for Covered Gain can range from 10% to even around 300% depends on the target price and settlement date.
What is the best time to use Covered Gain?
If you have a strong belief about what price BTC will grow to and that there will be a downward movement in price sooner or later after the increase, it is a good strategy to subscribe to our Covered Gain product to sell BTC at your target sell price and earn passive income simultaneously. You can treat passive income as a bonus along with your trade.
How does Covered Gain work?
Suppose you would like to sell 1 BTC at 22,000 USDT, but the current price of BTC is 20,000 USDT. In this case, you can subscribe to our Covered Gain product at the target sell price of 22,000 USDT to earn some interest before the price reaches your target. Assume you subscribed to Covered Gain with a target sell price of 22,000 USDT, duration of 1 day, APY of 30%, and return at the settlement of 0.6%.
You would expect the following payoff at settlement:
Scenario 1: Price of BTC < 22,000 USDT, you get (1+0.6%) in BTC
Scenario 2: Price of BTC ≥ 22,000 USDT, you get (1+0.6%)*22000 = 22132 in USDT
In other words, if the market price stays below the target price, you’ll earn interest in crypto at settlement. And if the market price rises above or at the target price, you’ll sell cryptos and interest earned at the strike price.
Note: APYs and returns are different with various settlement dates and strike prices, and we will provide you with different combinations for you to choose
The Steps to Create a Covered Gain Bot
- Log in to your account at pionex.com
- Find the “Earn” -> “Structured” button on the top bar tools
- Find the “Auto-invest” button on the left-hand side
- There is [Covered Gain] at the center of the page.
- Click on “Create the bot” and follow the instruction below
Step 1: Fill in the Following Parameters
- Select the crypto you would like to sell. Here in the graph, we choose BTC.
- Sell Price: the target price at which you want to sell cryptos.
- Investment: the number of cryptos you want to invest.
- Lowest Acceptance APY: your lowest expected APY. We will find products that have higher APY than your lowest expectation.
- Longest Tolerance Settlement Period: the longest settlement period you would tolerate to wait for the expiration.
After filling out all those parameters, click next.
STEP 2: Select the Product You Would Like to Invest
- you will see several products with different sell prices, annualized returns, and settlement periods (duration). These are products that Pionex finds for you based on your preferences.
- The information in the middle red box means that the target sell price is $20,000 with 66.597% APY and will settle two days later.
- On the bottom left of this page, by toggling Auto-reinvest, you can choose whether you want us to keep reinvesting for you until it gets exercised (successfully sell crypto).
- Select the product you would like to subscribe to, and click Next.
STEP 3: Make Sure Everything is Correct
You will finally be directed to the confirmation page. On this page, there are following information:
- The product information includes the buy price, settlement date, settlement period, APY, and the return at settlement.
- Your estimated profit in two scenarios at settlement. One shows the scenario of buying crypto, and the other shows the scenario of earning yield in USDT.
Please make sure you understand everything before selecting Purchase.
Benefits and Risk
Benefits: Before reaching your target sell price, you will keep earning high interest in crypto and sell more crypto once exercised.
Risk: It is possible that the price will keep going up after you successfully sell crypto. Please keep that in mind. It is also possible that the price of crypto at settlement is higher than your target sell price, in which case you will end up selling BTC at a lower price. It means you can lose some potential returns.
Q: What is the best time to use Covered Gain?
A: When you are holding some crypto spots waiting to earn some yield, and you are fine with selling crypto at your expected price, you can use Covered Gain. For example, you think the price of BTC may rise to $65,000, and if the price suddenly rises above $65,000, you are still fine with selling BTC at $65,000. In this case, you can subscribe to Covered Gain with a Target Sell Price of $65,000 with your expected settlement date. Then at settlement, if the current price is below $65,000, you will earn more BTC at the displayed yield. If the current price is above or at $65,000, your investment + yield in BTC will all be sold at $65,000 and go into your account.
Q: What would happen if I subscribed to a Covered Gain to sell BTC with a Target Sell Price of $65,000, but the price suddenly rises to $70,000 at settlement?
A: You will sell BTC at $65,000 and earn yield in USD simultaneously.
Q: Are there any risks associated with Covered Gain?
A: The risk of Covered Gain is the fundamental risk of investment. When your Covered Gain subscription gets exercised and sold crypto at your target sell price, you may not realize some of your investment gains if the market price keeps rising. This risk is similar to rising crypto prices after selling your crypto. At the settlement time of Covered Gain, if the current price is far from the target sell price, you will also need to take the risk of the price difference. For example, you subscribe to Covered Gain at a target price of $65,000 to sell BTC. The duration is 5 days. After 5 days, the price of BTC is $70,000 which is above the settlement price of $65,000; you will still sell BTC at $65,000 with your investment and interest earned in crypto.
Q: Can I edit or cancel my subscription?
A: Unfortunately, you CANNOT edit or cancel your subscription once you subscribe. Please read through the product terms carefully before subscribing.
Q: How can I view my subscription?
A: On Pionex Website:
Go to [Earn] – [Structued] – [Running orders]. Here you can view your current subscription and redemption items.
On Pionex APP:
Go to [Earn] -> [Structued]. Here you can view your current subscription and redemption items.
Risk Warning: There are huge risks in cryptocurrency transactions. Please purchase with caution and pay attention to the risks. Please note that Pionex is not responsible for any guarantee or compensation of your transactions.