View on market
BTC is trading within a channel, with low weekend volumes despite political claims about Bitcoin. Unrealistic proposals from candidates like buying BTC as a reserve and firing the SEC Chair have had no impact, with BTC expected to remain range-bound.
Bear Call Spread
The proposed strategy is a Bear Call Spread. A Bear Call Spread is achieved by simultaneously selling a call option and buying a call option at a higher strike price but with the same expiration date.
You might consider initiating this trade if you believe that BTC can see more sideways time.
Trade Structure
(OTM Call) Sell 1x BTC-09AUG24-$70,000-C @ $1,037
(OTM Call) Buy 1x BTC-09AUG24-$71,000-C @ $802
Target: Spot level < $70,000
Payouts
Maximum Profit: $235/BTC
Why are we taking this trade?
As highlighted in the attached daily chart of BTC, the cryptocurrency is trading within a channel, with five tests on the upper trend line. Trading volumes remained low over the weekend despite bullish claims about Bitcoin from presidential candidates and politicians. Robert Kennedy’s proposal to buy 4 million BTC as a strategic reserve from the open market is as unrealistic as Trump’s vote-catching comments about firing SEC Chair Gensler. It’s worth noting that the president cannot remove the chair of an independent commission like the SEC. Trump’s speech in Nashville lacked substance and offered no new insights, contributing to Bitcoin’s failure to rally. At this point, such propositions are merely attempts to garner votes.
As a result, I anticipate that BTC shall continue trading in the range. Traders can capitalize on this outlook on BTC using a Bear Call Spread strategy.
To execute this strategy, traders can sell a call option of a higher strike price, eg. $70,000 while simultaneously purchasing a call option at an even higher strike price, like $71,000.
In case of market upturn, the maximum loss is limited to $765. Maximum loss of Bear Call Spread = Difference between strike prices of calls ($71,000 – $70,000) – Net credit ($235).
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.
