View on market
If you remain optimistic about BTC, here’s a trading approach for short-term gains with brief expiry.
Call Butterfly:
The proposed strategy is a Call Butterfly Strategy. A Butterfly spread with calls is a three-part strategy that is created by buying one call at a lower strike price, selling two calls with a higher strike price and buying one call with an even higher strike price.
You can execute this trade if your views on BTC is for short-term upward potential.
Trade Structure
(OTM Call) Buy 1x BTC-3APR24-$72,000-C @ $620
(OTM Call) Sell 2x BTC-3APR24-$72,500-C @ $500
(OTM Call) Buy 1x BTC-3APR24-$73,000-C @ $410
Target: Spot level < $72,500
Payouts
Maximum Profit: $470/BTC
Debit of Strategy: $30/BTC
Why are we taking this trade?
Our stance on BTC remains consistent with the last trade. There haven’t been any notable declines, and crucial support zones remain relevant on the 4-hour chart. BTC is still closely positioned to it’s all-time high, indicating a positive outlook for the near future. Traders expecting further upward movement in the days ahead might find the call butterfly strategy advantageous for securing short-term gains.
To execute this approach, traders can purchase a call option with a higher strike price (e.g., $72,000) while simultaneously selling double the quantity of calls at a higher strike price (e.g., $72,500) and buying a call at an even higher strike price (e.g., $73,000).
If Bitcoin reaches $72,500 by the options’ expiry on April 3rd, traders will achieve maximum profit from this strategy.
In case of a market downturn, the potential loss is limited to the initial debit of $30.
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.
