View on market
BTC’s hourly chart is indicating choppiness due to resistance from overhead supply zones and price basing despite significant outflows in US BTC ETFs. Traders may find opportunities in the choppy market conditions by utilizing a Short Strangle strategy.
Short Strangle
The proposed strategy is a Short Strangle. A short strangle consists of one short call with a higher strike price and one short put with a lower strike. Both options have the same underlying and the same expiration date, but they have different strike prices.
You may take this trade if you think BTC will play in the range of $66,000 and $61,000.
Trade Structure
(OTM Call) Sell 1x BTC-27APR24-$66,000-C @ $150
(OTM Putl) Sell 1x BTC-27APR24-$61,000-P @ $135
Payouts
Maximum Profit: $285/BTC
Why are we taking this trade?
Examining the 1-hour chart of BTC, price action has been choppy. The overhead supply zone has capped prices to the upside, while to the downside, there seems to be a base forming. This suggests price could remain in a tight range for now. The price saw some resilience in falling yesterday, despite a significant outflow observed in yesterday’s session in US BTC ETFs.
I anticipate Bitcoin to continue trading sideways, as we find ourselves currently positioned between a demand zone and a supply zone, as indicated in the attached BTC price chart. Consequently, traders might consider navigating the choppy price action by employing a Short Strangle strategy.
If the Bitcoin price is greater than $61,000 and less then $66,000 when the options expire on April 27th, traders will achieve maximum profit from this strategy.
It’s important to note that a large price move in either direction could cause significant losses due to being short both a call and a put.
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.
