View on market
If you hold a positive outlook on BTC, here’s a tailored trading suggestion suited to the present market conditions.
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.
Feel free to execute this trade if you believe BTC has short-term upward potential.
Trade Structure
(OTM Call) Buy 1x BTC-5APR24-$75,000-C @ $940
(OTM Call) Sell 2x BTC-5APR24-$76,000-C @ $720
(OTM Call) Buy 1x BTC-5APR24-$77,000-C @ $550
Target: Spot level < $76,000
Payouts
Maximum Profit: $950/BTC
Debit of Strategy: $50/BTC
Why are we taking this trade?
BTC hasn’t experienced significant pullbacks, and prominent demand zones are evident on the 4-hour chart. Its proximity to the all-time high indicates a bullish outlook in the short term. Traders expecting this bullish trend over the next few days might opt for a call butterfly strategy to capitalize on short-term gains.
To implement this strategy, traders can buy a higher strike call option (e.g., $75,000) and simultaneously sell calls in double quantity (2x) with a higher strike price (e.g., $76,000) and buy call with an even higher strike price (e.g., $77,000)
If Bitcoin is at $76,000 when the options expire on April 5, 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 $50.
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.
