Research Summary
The report discusses the potential bullish momentum of Polygon (MATIC) due to the SEC’s request for amendments in the filings of spot Ethereum ETFs. It suggests a Bull Call Spread strategy for traders with a bullish perspective on Polygon, aiming for a target spot level of $0.95.
Key Takeaways
SEC’s Influence on Altcoins
- SEC’s Request Boosts Altcoins: The report highlights that the US SEC’s request for amendments to the 19b-4 filings for spot Ethereum ETFs has led to a significant rally in altcoins, including MATIC. This development increases the likelihood of the SEC approving such products, which could further boost altcoins.
Polygon’s Bullish Momentum
- Anticipated Bullish Momentum for Polygon: The report anticipates a bullish momentum for Polygon due to advancements like Miden, a zero-knowledge rollup designed to enhance Ethereum’s scalability, speed up transaction times, and reduce costs for users. Polygon has shown strength from a higher time frame demand zone, and the next resistance level is at $0.95.
Bull Call Spread Strategy
- Proposed Bull Call Spread Strategy: The report proposes a Bull Call Spread strategy for traders with a bullish perspective on Polygon. This strategy involves buying a call option at a lower strike price and simultaneously selling a call option at a higher strike price. The maximum profit from this strategy is $48.5 per contract, with a net debit of the strategy at $1.5 per contract.
Trade Execution on Deribit
- Trade Execution Steps: The report provides steps on how to execute this trade on Deribit. Traders need to go to Options books under MATIC_USDC, select expiry, choose the strike, and execute the trade.
Risk Management
- Potential Loss: In case of a market downturn, the potential loss is limited to the initial debit of $1.5. This risk management aspect is crucial for traders considering this strategy.
Actionable Insights
- Monitor SEC’s Decisions: Traders should keep a close eye on the SEC’s decisions regarding the amendments to the 19b-4 filings for spot Ethereum ETFs, as this could significantly impact altcoins, including Polygon.
- Consider Bull Call Spread Strategy: If traders have a bullish perspective on Polygon, they might consider implementing a Bull Call Spread strategy, aiming for a target spot level of $0.95.
- Manage Risk: Traders should be aware of the potential loss in case of a market downturn, which is limited to the initial debit of $1.5 per contract in this strategy.
