{"id":41,"date":"2021-02-27T22:11:02","date_gmt":"2021-02-27T22:11:02","guid":{"rendered":"https:\/\/cryptoheretostay.com\/2021\/02\/27\/this-bullish-bitcoin-options-strategy-lets-traders-speculate-on-btc-price-with-less-risk\/"},"modified":"2021-02-27T22:11:02","modified_gmt":"2021-02-27T22:11:02","slug":"this-bullish-bitcoin-options-strategy-lets-traders-speculate-on-btc-price-with-less-risk","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=41","title":{"rendered":"This bullish Bitcoin options strategy lets traders speculate on BTC price with less risk"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>Historical data shows that it is nearly impossible to consistently predict Bitcoin\u2019s price action and many traders that attempt this end up losing money. Now that Bitcoin trades near $50,000, the ultimate goal for most traders is to hold on to their current holdings and incrementally add to them in a way that is not terribly risky.\u00a0<\/p>\n<p>Options strategies provide excellent opportunities for traders who have a fixed-range target for an asset. For example, using leveraged futures contracts might be a solution for a scenario where one expects a price increase of up to 28% over the next month. Of course, using a tight stop loss lessens the viability of the trade.<\/p>\n<p>On the other hand, using multiple call (buy) options can create a strategy that allows gains that are four times higher than the potential loss. These can be used in both bullish and bearish circumstances, depending on the investors&#8217; expectations.<\/p>\n<p>The long butterfly strategy allows a trader to profit from the upside while limiting losses. It\u2019s important to remember that options have a set expiry date; therefore, the price increase must happen during the defined period.<\/p>\n<p>The Bitcoin (BTC) calendar options below are for the March 26 expiry, but this strategy can also be used on Ether (ETH) options or a different time frame. Although the costs will vary, its general efficiency should not be affected.<\/p>\n<p><em>Profit \/ Loss estimate. Source: Deribit Position Builder<\/em><\/p>\n<p>The suggested bullish strategy consists of buying 1 BTC worth $48,000 call options while simultaneously selling double that amount of $56,000 calls. To finalize the trade, one should buy 1 BTC worth of $64,000 call options.<\/p>\n<p>While this call option gives the buyer the right to acquire an asset, the contract seller gets a (potential) negative exposure. <\/p>\n<p>As the estimate above shows, if BTC is trading for $48,700, any outcome between $49,380 (up 1.5%) and $62,630 (up 28.6%) yields a net gain. For example, a 10% price increase to $53,570 results in a $4,000 net gain. Meanwhile, this strategy&#8217;s maximum loss is $1,350 if BTC trades below $48,000 or above $64,000 on March 26.<\/p>\n<p>This allure of this butterfly strategy is the trader can secure a $4,050 gain, which is 3x larger than the maximum loss, if BTC trades from $53,550 to $58,460 expiry. <\/p>\n<p>Overall it yields a much better risk-reward from leveraged futures trading considering the limited downside. <\/p>\n<p>The multiple options strategy trade provides a better risk-reward for bullish traders seeking exposure to BTC\u2019s price increase and the only upfront fee required is the $1,350 which reflects the maximum loss if the price is below $48,000 or above $64,000 at the expiry date. <\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><em>autho<\/em><em>r<\/em><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/this-bullish-bitcoin-options-strategy-lets-traders-speculate-on-btc-price-with-less-risk\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Historical data shows that it is nearly impossible to consistently predict Bitcoin\u2019s price action and many traders that attempt this end up losing money. Now that Bitcoin trades near $50,000, the ultimate goal for most traders is to hold on to their current holdings and incrementally add to them in a way that is not [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":42,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-41","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/41","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/41\/revisions"}],"predecessor-version":[{"id":43,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/41\/revisions\/43"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/42"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}