{"id":214923,"date":"2021-03-30T21:30:45","date_gmt":"2021-03-30T18:30:45","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bullish-traders-cast-low-risk-ethereum-options-bets-with-this-clever-strategy\/"},"modified":"2021-03-30T21:30:45","modified_gmt":"2021-03-30T18:30:45","slug":"bullish-traders-cast-low-risk-ethereum-options-bets-with-this-clever-strategy","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bullish-traders-cast-low-risk-ethereum-options-bets-with-this-clever-strategy\/","title":{"rendered":"# Bullish traders cast low-risk Ethereum options bets with this clever strategy"},"content":{"rendered":"

“# Bullish traders cast low-risk Ethereum options bets with this clever strategy <\/strong>”<\/p>\n

Ether (ETH) has been making higher lows throughout 2021, and the current trend indicates that $1,800 might be the bottom for April. Even traders and investors who do not rely on technicals have become optimists after Visa initiated a pilot to settle transactions in USD Coin (USDC) through the Ethereum network.<\/p>\n
Ether price in USD at Coinbase. Source: TradingView<\/em><\/figcaption><\/figure>\n

Given that Ether’s price is looking like it’s ready to pursue new yearly highs, there’s a few investment options on the table. Buying and holding is an excellent strategy, as well as a leveraged long position up to 2x. The problem lies on the downside, as a 20% move would result in a 40% loss using futures contracts. Not to mention there is not much room for additional leverage as it requires a considerable upfront.<\/p>\n

On the other hand, options strategies provide excellent opportunities for traders who have a fixed-range target. For example, for those expecting a moderate 15% price increase in thirty days, the ‘Iron Condor’ strategy provides 12% gains with minimal upfront funds required. This strategy also limits the downside to 10%, regardless of how the asset performs.<\/p>\n

This bullish strategy consists of buying 10 Ether worth of $1,600 put options while simultaneously selling the same amount of $2,240 calls. To finalize the trade, the buyer will sell 7.5 Ether worth of $2,080 put options and balance it by buying 8 Ether contracts of $2,880 call. <\/p>\n

Unlike perpetual futures (inverse swaps), options have a set expiry date, so the expected outcome must happ<\/a>en during the defined period.<\/p>\n

The Ether (ETH) calendar option below refers to the April 30 expiry, but this strategy can also be used on Bitcoin (BTC) or applied on a different time frame.<\/p>\n

Derivatives exchanges price these contracts in Ether, meaning the displayed profits and losses are calculated by Ether fractions at the expiry date.<\/p>\n

Profit \/ Loss estimate. Source: Deribit Position Builder<\/em><\/figcaption><\/figure>\n

Considering that Ether is currently trading at $1,810, any outcome between $1,790 and $2,545 (up 40.6%) yields a net gain. For example, a 15% price increase to $2,080 results in a 1.2 ETH net gain, or $2,500.<\/p>\n

Meanwhile, this strategy’s maximum loss is 1.04 ETH, which will happen if the price on April 30 is below $1,600 (down 12%) or above $2,545.<\/p>\n

The Iron Condor strategy allure is the potential 1.2 ETH gain while losses are limited below $1,600 at expiry. <\/p>\n

Overall this conservative strategy yields a much better risk-reward compared to leveraged futures trading because of the limited downside. The upfront cost (deposit) is 1.04 ETH, and this also reflects the maximum potential loss. <\/p>\n

The views and opinions expressed here are solely those of the <\/em>author<\/em><\/a> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n