View on market
BTC is retracing from the 4H supply zone and daily data of BTC ETF is unfavorable making my view neutral with slight short-term bullish bias, here’s a trading approach for traders.
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 (or more) of the same option type (Call) of the same expiry, further OTM.
You may consider taking this trade if your perspective aligns with a sideways to bullish outlook on BTC.
Trade Structure
(OTM Call) Buy 1x BTC-19APR24-$66,500-C @ $550
(OTM Call) Sell 2x BTC-19APR24-$68,500-C @ $270
Target: Spot level < $68,500
Payouts
Maximum Profit: $1,990/BTC
Net Debit of Strategy: $10/BTC
Why are we taking this trade?
BTC hasn’t shown a strong upward momentum after reaching the 4H demand zone, instead, it’s retracing from the 4H supply zone, as illustrated in the attached BTC price chart. Additionally, the BTC ETF’s flow data doesn’t look promising. The market is currently influenced by the FED’s opinion to reduce the number of rate cuts, which is looming the market.
Given these factors, my market stance is neutral with a slight bullish inclination for a short term basis because the 4-hour demand zone is still intact. Traders interested in capitalizing on this perspective might consider employing a call ratio spread strategy.
To implement this strategy, traders can buy a higher strike call option (e.g., $66,500) and simultaneously sell calls in double quantity (2x) of a higher strike price (e.g., $68,500).
If Bitcoin is at $68,500 when the options expire on April 19, traders will be at maximum profit from the strategy.
It’s important to note that while the initial debit of this strategy is $10, losses beyond the initial debit 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.
