View on market
Bitcoin suggesting further price increases as the retracements from resistance pivots are not significant.
Bull Call Spread
The proposed strategy is a Bull Call Spread. A Bull Call Spread consists of one long Call with a lower strike price and one short Call with a higher strike price. Both Calls have the same underlying and the same expiration date. It is established for a net debit (or net cost) and profits as the underlying price rises.
You may consider taking this trade if you expect the BTC price to rise as the retracements from resistance pivots are not significant.
Trade Structure
(OTM Call) Buy 1x BTC-08NOV24-$65,000-C @ $4,180
(OTM Call) Sell 1x BTC-08NOV24-$67,000-C @ $3,590
Target: Spot level > $67,000
Payouts
Maximum Profit: $1,410/BTC
Debit of Strategy: $590/BTC
Why are we taking this trade?
As highlighted in yesterday’s insight, I anticipated that Bitcoin had established a short-term low, with a noticeable recovery and minimal pullbacks as it broke through resistance levels. This suggested that the uptrend might continue, though at a slower pace. We observed similar behavior, with the price reaching around the 61,200 level before experiencing some retracements. However, these retracements were not significant, leading me to believe that the uptrend can persist. We can therefore expect the price to continue trading higher with the increased institutional flows, reinstating a bullish market environment.
US Elections are to be held on 5th Nov 2024, hence 8th Nov expiry is therefore the Election’s expiry.
Traders might consider deploying a Bull Call Spread strategy to capitalize on this anticipated price movement based on the above analysis.
To implement this strategy, traders can buy a Call option at a lower strike price (e.g., $65,000) and simultaneously sell a Call option at a higher strike price (e.g., $67,000).
If the price of BTC is at or above $67,000, when the options expire on November 8th, traders will achieve maximum profit from this strategy.
In case of a market downturn, the potential loss is limited to the initial debit of $590.
How to take this trade on Deribit?
Step 1: Go to the “Combo Books” page, which can be found in the top menu under “Strategy”.
Step 2: Go to the “Create Combo” tab, and enter the details for the desired combo. At this stage you’re just creating the order book for the combo, so you don’t need to worry about the direction.
Step 3: Click “Create and RFQ”, and then click “Confirm”, to create an order book for the combo.
Step 4: Go to the “Combo List (BTC)” tab, click on the desired combo to open the order book.
Step 5: Enter your order details and execute. Depending on the direction of the trade, you may need to either buy or sell the combo. The direction of each leg is displayed under the Buy and Sell buttons.
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.
