Historical data shows that it is nearly impossible to predict Bitcoin's price action consistently. Many traders who attempt this end up losing money. With Bitcoin trading near $50,000, Bitcoin Options traders should aim to keep their existing holdings and add incrementally to them in a manner that isn't too risky. Options strategies offer excellent opportunities to traders who have a fixed target asset. Leveraged futures contracts could be used in a situation where there is a possibility of a 28% price rise over the next month. The trade's viability is affected if the stop loss is too tight. However, if you use multiple call (buy), options, your potential gains can be four times greater than the loss. These options can be used in bullish or bearish situations depending on investors' expectations. The Long Butterfly Strategy allows traders to profit from the upside while limiting their losses. Remember that options have an expiry date. Therefore, price increases must occur within the specified period. These options for Bitcoin (BTC), are valid until March 26, but you can use this strategy on Ether (ETH), or another time period. While the cost of this strategy will be different, it should still work well. A bullish strategy would be to buy 1 BTC and then simultaneously sell 2 BTC worth $56,000 call options. The trade should be completed by purchasing 1 BTC for $64,000 in call options. Although this Call Option gives the buyer the right to acquire an asset, the contract seller gets a (potentially negative) exposure. The above estimate shows that if BTC trades at $48,700, any outcome between $49.380 (up 1.5%) or $62,630 (up 28,.6%) will result in a net gain. A 10% price rise to $53,570 would result in a $4,000 net profit. This strategy's maximum loss is $1350 if BTC trades lower than $48,000 or higher than $64,000 on March 26. The beauty of the butterfly strategy is that it allows traders to make a profit of $4,050, 3 times greater than the maximum loss. This is assuming BTC trades between $53,550 and $58,460 expiry. It offers a better risk-reward ratio than leveraged futures trading, considering its limited downside. Multiple options trades offer bullish traders greater risk-reward ratio. The only upfront fee is $1,350. This reflects the maximum loss if BTC price falls below $48,000 or $64,000 at expiry.. Please like, subscribe and share this video. It would really help, thanks.
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