View on market
If your view is Bullish on BTC here is a trade idea that will work in the current market scenario.
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 may take this trade if you think BTC has upside potential on a short term basis.
Trade Structure
(OTM Call) Buy 1x BTC-29MAR24-77,000-C @ $270
(OTM Call) Sell 2x BTC-29MAR24-80,000-C @ $120
(OTM Call) Buy 1x BTC-29MAR24-85,000-C @ $30
Target: Spot level < $80,000
Payouts
Maximum Profit: $2940/BTC
Net Debit of Strategy: $60/BTC
Why are we taking this trade?
Bitcoin has surged past the triangle pattern barrier at approximately $68,000, breaking resistance levels in the 4-hour timeframe which suggests a bullish stance in the short term. Traders anticipating this bullish movement over the next couple of days may consider employing a call butterfly strategy for short term gains.
To implement this strategy, traders can buy a higher strike call option (e.g., $77,000) and simultaneously sell calls in double quantity (2x) with a higher strike price (e.g., $80,00) and buy call with an even higher strike price (e.g., $85,000)
If Bitcoin touches $80,000 until the expiry date (March 29), traders will be at maximum profit from the strategy.
Should there be a market downturn, the downside risk is confined to the initial debit of $60. It’s worth noting substantial open interest at the $80,000 mark, indicating a potential resistance level that could amplify profits around this threshold.
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.
