View on market
BTC is showing signs of recovery after the August 5th sell-off, respecting a key demand zone, which suggests potential movement toward the $62,000 resistance level.
Call Ratio Spread
The proposed strategy is a Call Ratio Spread. A Call Ratio Spread involves buying a Call option that is OTM, and then selling two Calls of the same expiry, further OTM.
You might consider initiating this trade if you believe that BTC has shown signs of recovery and can hit the next resistance area around$62,000.
Trade Structure
(OTM Call) Buy 1x BTC-16AUG24-$60,000-C @ $971
(OTM Call) Sell 2x BTC-16AUG24-$62,000-C @ $542
Target: Spot level < $62,000
Payouts
Maximum Profit: $2,113 / BTC
Net Credit of Strategy: $113 / BTC
Why are we taking this trade?
In recent trading sessions, Bitcoin (BTC) has shown signs of recovery following the sell-off on August 5th. During its retracement from the $57,700 pivot level, BTC managed to bounce back and respected the lower time frame demand zone as highlighted in the attached 2-hour price chart. As the price has respected this lower time frame support / demand zone, it could indicate a bullish signal for BTC price action. I anticipate it to move toward the next resistance area, which is approximately at the $62,000 level.
Hence, traders can consider deploying a Call Ratio strategy to capitalize on this outlook in BTC.
To implement this strategy, traders can buy a Call option (e.g., $60,000) and simultaneously sell Calls in double the quantity (2x) of a higher strike price (e.g., $62,000).
If the price of Bitcoin is at $62,000 when the options expire on August 16th, traders will be at maximum profit from the strategy.
It’s important to note that while this strategy collects an initial credit of $113, significant losses are possible due to the position’s net short Call exposure.
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.
