Bitcoin 's low of $17,580 on June 18 has left traders speculating and considering it to be the bottom. Despite recent fluctuations with BTC struggling to surpass the $21,000 mark in daily closing over the past six days, traders find bitcoin to be in uncertain territory.
These concerns are further compounded by concerns surrounding the potential bankruptcy of various CeFi and DeFi entities , following the failure of the likes of Three Arrows Capital (3AC) to meet financial obligations and Babel Finance citing liquidity pressures.
Regulatory scrutiny has intensified following recent events, especially when Celsius stopped withdrawing users on June 12. This prompted securities regulators in five US states to initiate investigations into crypto lending platforms.
While the trajectory of sentiment remains unpredictable, traders expecting a rise to $28,000 in August can use a low-risk options strategy that offers promising returns with controlled risk.
Strategic Options Game: The Iron Condor
Although some traders choose high-risk futures contracts, many seek methods to optimize profits while mitigating losses. The “Iron Condor” strategy is one such approach, designed to maximize profits around $28,000 at the end of August, while containing losses if the price falls below $22,000.
Iron Condor requires the sale of call and put options at the same price and expiration date. In this scenario, the August 26 contract is used, although the strategy can be adjusted for different time periods.
Executing Trades
To implement this strategy, an investor would sell 3.4 contracts of a $26,000 call option and 3.5 contracts of a $26,000 put option, repeating the process for a $30,000 option in the same expiration month. Additionally, the purchase of 7.9 put option contracts worth $23,000 served to protect against downside risk. Furthermore, acquiring 3.3 $38,000 call option contracts helped limit losses above this threshold.
Potential Returns and Risk Management
This strategy could prove profitable if Bitcoin trades in the range of $23,850 to $35,250 on August 26. Net profits peaked at 0.63 BTC ($13,230 at current exchange rates) between $26,000 and $30,000, remaining above 0.28 BTC ($5,880 at current exchange rates) in the $24,750 to $32,700 range.
The required initial investment equals the maximum potential loss, of 0.28 BTC or $5,880, if Bitcoin trades below $23,000 or above $38,000 on August 26. Despite the risks, this strategy offers coverage within a reasonable target area, providing 125% returns compared to potential losses.
How To Buy Crypto With Bittime
You can buy and sell crypto assets in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn How to Buy Crypto on Bittime.
Monitor price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
Impermanent Loss that Traders Must Know and Be Aware of
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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