Long-term Bitcoin options and bulls are still making waves with their ultra-bullish bets, but even they must admit (Bitcoin) Trading more than $60,000 in the next few months is bleak.
Many traders increase leveraged long positions through futures contracts to chase elusive historical highs, but this seems to be an unrealistic result.
According to popular on-chain analyst Willy Woo, the exchange outflow and accumulation of BTC miners and whales indicates that the price of Bitcoin will Reach the range of USD 50,000 to USD 65,000 In the next meeting.
Even Gary Kinsler, chairman of the US Securities and Exchange Commission, believes that Cryptocurrency will not disappear And it is likely to play an important role in the future of finance. Therefore, moderate bullishness in the next few months may produce positive results.
For bullish traders who believe that the price of Bitcoin will break through to the upside but are unwilling to face the liquidation risks imposed by futures contracts, the “call option long bald eagle” strategy may produce more desirable results.
Options are safer bets to avoid liquidation
The options market provides greater flexibility for developing customized strategies, and there are two tools available. Call options provide buyers with upward price protection, while protective put options do the opposite. Traders can also sell derivatives to create unlimited negative exposure, similar to a futures contract.
This long-term condor strategy has been set to expire on September 21 and uses a slightly bullish range. The same basic structure applies to bearish expectations, but we assume that most traders are looking for upside.
At the time of pricing, the transaction price of Bitcoin was $37,830, but a similar result can be achieved from any price level.
The first transaction requires the purchase of a 1.20 BTC call option worth $42,000 to create positive exposure above this price level. Then, in order to limit the gain to more than 46,000 USD, the trader needs to sell the 1.1 BTC contract of the 46,000 USD call option.
In order to complete this strategy, the trader needs to sell 1.3 BTC contracts with US$56,000 call options to limit the gains above this price level. If Bitcoin surges unexpectedly, an upside protection requirement of $60,000 of 1.22 BTC is required to limit losses.
In this case, the gains outweigh the losses
This strategy may sound complicated to execute, but the required margin is only 0.0265 BTC, which is also the biggest loss. If the Bitcoin transaction price is between $42,950 (up 13.5%) to $59,450 (up 57%), it will generate potential net profit.
Traders should remember that if there is sufficient liquidity, they can also close their positions before expiration on September 21. The maximum gain occurred between 46,000 USD and 56,000 USD for 0.0775BTC, which is almost three times the potential loss.
There are more than 50 days before the expiry date. This strategy gives holders peace of mind because there is no liquidation risk like futures trading.
Another positive factor is that most derivatives exchanges accept orders as low as 0.10 BTC contracts, which means that traders can use a smaller number to build the same strategy.
The views and opinions expressed here only represent author It does not necessarily reflect the views of Cointelegraph. Every investment and transaction involves risks. When making a decision, you should conduct your own research.
