View on market
Solana’s price breakout from a descending channel pattern signals a bullish trend, supported by rising RSI from oversold levels. Wealth Manager VanEck has filed for the first-ever Solana ETF with the SEC, highlighting Solana’s strong market demand and decentralized network.
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 Calls of the same expiry, further OTM.
You might consider initiating this trade if you believe that SOL can follow a bullish trend as triangular pattern breakout is observed.
Trade Structure
(OTM Call) Buy 1x SOL_USDC-5JUL24-$160-C @ $2.27
(OTM Call) Sell 2x SOL_USDC-5JUL24-$170-C @ $1.15
Target: Spot level < $170
Payouts
Maximum Profit: $100.3 per contract
Net Credit of Strategy: $0.3 per contract
Why are we taking this trade?
Solana price action suggests that it has broken out of a descending channel pattern, indicating a bullish trend. This breakout is clearly depicted in the attached 4-hour chart, providing strong technical confirmation. The Relative Strength Index (RSI) on the daily chart is rising from an oversold condition and is poised to break above the median value of 50.
Solana stands out among a few crypto assets with strong market demand and a highly decentralized network. Solana is renowned for its high-performance blockchain platform, known for scalability and low transaction fees. Wealth Manager VanEck is expanding its crypto offerings with a Solana trust. In a significant move, VanEck has submitted the first-ever application for a Solana (SOL) exchange-traded fund (ETF) to the Securities and Exchange Commission (SEC).
Hence, there is a positive atmosphere for SOL all around as ETH ETFs are almost on verge of trading, and next looks to be Solana ETFs, hence, traders can consider deploying a Call Ratio strategy to capitalize on the bullish atmosphere in the underlying.
To implement this strategy, traders can buy a higher strike Call option (e.g., $160) and simultaneously sell Calls in double the quantity (2x) of a higher strike price (e.g., $170).
If Sol’s prices are at $170 when the options expire on July 5th, traders will be at maximum profit from the strategy.
It’s important to note that while this strategy collects an initial credit of $0.3 per contract, significant losses are possible due to the position’s net short Call exposure.
Note: Solana Contract Multiplier is 10.
How to take this trade on Deribit?
Step 1: Go to Options books under SOL_USDC & Select expiry.
Step 2: Choose Strike and execute your trade.
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.
