Strategy: Call Ratio Spread
View: Moderately Bullish View on BTC
> Sell 1x BTC-8MAR24-68500-C @ $450
> Buy 1x BTC-8MAR24-70000-C @ $210
Target: Spot level < $70,000 &
Payoff chart at Expiry
Max Profit: $1470/BTC
Max Debit of Spread: $30/BTC
Why are we taking this trade?
BTC experienced a brief retracement after reaching a new swing high of $69,000, followed by a solid recovery to around $67,700 levels. Rather than expecting another rapid surge, I anticipate BTC to ascend at a more moderate pace over the next few days.
To capitalize on this anticipated move up to $70,000, a 1×2 call ratio spread presents an opportunity. With significant open interest at $70,000, it serves as a potential point for BTC to pause, maximizing potential profits at the chosen short strike.
In the event of a price drop, losses are limited to the initial debit of $30. However, a rapid increase in volatility leading to a substantial upward move would not be ideal, given the position’s net short call exposure.
Should the underlying price reach $70,700 within the next 4 hours, signalling a deviation from the anticipated price move, I would consider closing the position.
How to take this trade on Deribit?
Step 1: Go to Combo books under the Strategy tab & create combo.
Step 2: Click RFQ and send your order to the Combo List.
Step 3: Go to Combo list (BTC), click on your Strategy and execute.
Disclaimer
This report must not be used as a singular basis of any trading decision. The document includes analysis and views of our research team. The document is purely for information purposes and does not constitute trading recommendation/advice or an offer or solicitation of an offer to buy/sell any contract.
