Research Summary
The report discusses a moderately bullish view on Bitcoin (BTC) and suggests a call ladder strategy to leverage potential upward momentum. The strategy involves buying and selling options at different strike prices, with a target spot level between $74,000 and $78,000. The report also provides steps on how to execute this strategy on Deribit.
Key Takeaways
Bullish Outlook on Bitcoin
- Anticipated Upward Momentum: The report suggests that Bitcoin is forming higher lows on its daily chart and has shown resilience, recently reaching a new all-time high. The author anticipates further upward momentum, possibly reaching $74,000.
Call Ladder Strategy
- Strategy Execution: To leverage the potential upward movement of Bitcoin, the report suggests a 1x1x1 call ladder strategy. This involves buying a call option at a lower strike price and selling two call options at higher strike prices.
- Target Spot Level: The target spot level for this strategy is between $74,000 and $78,000. The report suggests that these levels could serve as points of resistance, potentially maximizing profits within this range.
Risks and Considerations
- Potential Losses: While the initial debit of this strategy is $0, the report warns that losses could be theoretically Notional in the event of a price decline. Additionally, a sudden surge in volatility leading to a substantial upward movement could be disadvantageous due to the position’s net short call exposure.
- Timing: If the underlying price reaches $76,000 within the next two days, the report suggests considering closing the position to secure potential gains.
Execution on Deribit
- Trade Execution: The report provides a step-by-step guide on how to execute this call ladder strategy on Deribit, a cryptocurrency futures and options trading platform.
Actionable Insights
- Monitor Bitcoin’s Price: Keep a close eye on Bitcoin’s price movement, particularly if it forms higher lows on its daily chart, as this could indicate a potential upward momentum.
- Consider Call Ladder Strategy: If you have a moderately bullish view on Bitcoin, consider implementing a call ladder strategy. This involves buying and selling options at different strike prices to leverage potential upward movement.
- Be Aware of Risks: Understand the risks associated with this strategy, including potential Notional losses in the event of a price decline and the disadvantage of a sudden surge in volatility due to the position’s net short call exposure.
- Timing is Key: If the underlying price reaches $76,000 within the next two days, consider closing the position to secure potential gains.
