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Bullish Bitcoin options focuses on $50k

By
Redakcja
-
4 min reading

The Long Condor options strategy is supporting traders to place bullish bets without the risk of liquidation. Since forever Bitcoin options and bulls have managed to create a stir with their ultra-bullish bets. But now even they have to come to terms with the fact that there is a slight chance of (BTC) trading going above $60,000 in the coming months seems a bit dull.

The Long Condor options strategy is supporting traders to place bullish bets without the risk of liquidation. Since forever Bitcoin options and bulls have managed to create a stir with their ultra-bullish bets. But now even they have to come to terms with the fact that there is a slight chance of (BTC) trading going above $60,000 in the coming months seems a bit dull. 

There are many traders who have purchased long-positions through future contracts to chase after the unattainable all-time high but now this seems like a fairy-tale dream unrealistic and a total fiction. Willy Woo, a popular on-chain analyst, believes that exchange outflows and collection from BTCX miners and whales proves that Bitcoin price will reach the $50,000 to $65,000 range in the future sessions. But Gary Gensler, the Chair of The United States Securities and Exchange Commission thinks otherwise he expects cryptocurrency to stay within the game and play a very vital role in the future of finance. Hence, being slightly bullish for the next couple of months will give out positive results. 

If the bullish traders think Bitcoin price will fall apart to the upside but are not interested in facing the liquidation risks inflicted by futures contracts, the “long condor with call options” method might yield extra optimal results. Options markets give out more pliability to construct custom strategies and there are two instruments available. The call option allows buyer upside price protection whereas, the protective put option does the rare opposite. Traders are given the option to sell the derivatives to built unlimited negative exposure which is somewhat same to a futures contract. 

The long condor strategy has been planned for the September 21 expiry and uses a slightly bullish range. This identical basic structure can be applied for bearish expectations but we can come to the conclusion that majority of the traders are expecting the upside. Bitcoin was seen trading at $37,830 when the pricing starting from any price level. The initial trade has to purchase 1.20 BTC worth of $42,000 call options to make a positive exposure above the given price level. Then afterwards to limit gains above $46,000 call. To finish this strategy, the trader needs to sell 1.3 contracts of the $56,000 call, halting the gains above this price level. Then a $60,000 upside protection call for 1.22 BTC is required to restrict the losses if Bitcoin suddenly increases. 

This strategy mind sounds complex and tough to execute, but the margin required is only 0.0265 BTC, which is also a complete loss. This possible net profit happens if Bitcoin trades between $42,950 (up 13.5%) and $59,450 (up 57%). Traders should be aware that there are chances to close the position ahead of the Sep.21 expiry if there is enough liquidity. The max gain occurs between $46,000 and $56,000 at 0.0775BTC which is over three time higher than the basic loss. One of the optimistic factors are that most derivatives exchanges accept orders as low as 0.10 BTC contracts which means a trader could build the same idea using a much smaller incentive.  

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