{"id":363774,"date":"2021-11-08T02:35:09","date_gmt":"2021-11-07T23:35:09","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/how-cautiously-bullish-bitcoin-traders-use-options-to-maintain-btc-exposure\/"},"modified":"2021-11-08T02:35:09","modified_gmt":"2021-11-07T23:35:09","slug":"how-cautiously-bullish-bitcoin-traders-use-options-to-maintain-btc-exposure","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/how-cautiously-bullish-bitcoin-traders-use-options-to-maintain-btc-exposure\/","title":{"rendered":"# How cautiously bullish Bitcoin traders use options to maintain BTC exposure"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2537687933c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2537687933c\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/how-cautiously-bullish-bitcoin-traders-use-options-to-maintain-btc-exposure\/#Options_allow_traders_to_bet_on_bullish_and_bearish_moves\" >Options allow traders to bet on\u00a0 bullish and bearish moves<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/how-cautiously-bullish-bitcoin-traders-use-options-to-maintain-btc-exposure\/#How_to_limit_losses_and_keep_unlimited_gains\" >How to limit losses and keep unlimited gains<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># How cautiously bullish Bitcoin traders use options to maintain BTC exposure <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>Bitcoin (BTC) traders <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ear undecided on the next step and this is reflected in the price oscillating between $58,400 and $63,400 over the last 14 days. There are some bearish signals coming from the United States regulatory front, but at the same time,the Bitcoin exchange-traded funds (ETF) surpassing $1.2 billion in assets under management has also boosted investors\u2019 expectations.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/44107e8f-4fce-4994-a0c2-e65430e79648.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin price in USD at Coinbase. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>A Nov. 5 CryptoQuant report confirmed that whales have accounted for most selling pressure in recent days. The on-chain monitoring resource focused its attention on the \u201cexchange whale ratio\u201d \u2014 the percentage of inflows coming from the largest wallets \u2014 and showed a clear increase from the middle of October until today.<\/p>\n<p>Moreover, on Nov. 1, the U.S. Treasury Department urged Congress to act promptly to enact legislation to ensure that payment stablecoin issuers are regulated similarly to the U.S. banks. In practice, the report recommends that stablecoins should be issued only through \u201centities that are insured depository institutions.\u201d<\/p>\n<p>Still, institutional money managers managed to add $2 billion worth of Bitcoin through mutual funds in October. According to the Oct. 31 CoinShares flow report, ProShares Bitcoin Strategy ETF, which launched officially on Oct. 19, accounted for $1.2 billion in inflow.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Options_allow_traders_to_bet_on_bullish_and_bearish_moves\"><\/span>Options allow traders to bet on\u00a0 bullish and bearish moves<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Contrary to popular belief, derivatives markets were not designed for gambling and excessive leverage. Derivatives trading has been around for more than five decades and institutional traders have been shifting their attention \u2014 and volume \u2014 to cryptocurrency over the past couple of years.<\/p>\n<p>The subject became the centerpiece on July 7, as Bloomberg reported a $4.8 million options trading gain from the husband of Nancy Pelosi, the Speaker of the U.S. House of Representatives. In a July 2 financial disclosure, Paul Pelosi reported exercising call options to acquire 4,000 shares of Alphabet, Google\u2019s parent company, at a strike price of $1,200.<\/p>\n<p>Options trading presents different opportunities for investors seeking to profit from increased volatility, maximizing gains if the price remains in a specific range, or obtaining protection from sharp price drops. Those complex trades involving more than one instrument are known as options structures. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_to_limit_losses_and_keep_unlimited_gains\"><\/span>How to limit losses and keep unlimited gains<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>For those unfamiliar with options trading, Cointelegraph previously published an article detailing all of the ins and outs of options, including the benefits over futures contracts trading. <\/p>\n<p>To hedge losses from unexpected price swings, one can use the \u201crisk reversal\u201d options strategy. The investor benefits from being long on the call options, but pays for those by selling the put. Basically, this setup eliminates the risk of the stock trading sideways but does come with substantial risk if the asset trades down.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/14fe23b7-8397-4f7b-b1f8-f492cd348955.png\"><figcaption style=\"text-align: center;\"><em>Profit and loss estimate. Source: Deribit Position Builder<\/em><\/figcaption><\/figure>\n<p>The above trade focuses exclusively on Dec. 31 options, but investors\u2019 will find similar patterns using different maturities. First, one needs to buy protection from a downside move by buying 2.45 BTC puts (sell) $44,000 options contracts. <\/p>\n<p>Then, the trader will sell 2 BTC put (sell) $54,000 options contracts to net the returns above this level. Finally, buying 2.20 call (buy) $85,000 options contracts for positive price exposure.<\/p>\n<p>That options structure results in no gain or loss between $54,000 (down by 11.5%) and $85,000 (up by 39%). In doing this, the investor is betting that Bitcoin price on Dec. 31 at 8:00 am UTC will be above that range while gaining exposure to unlimited gains and a maximum BTC 0.455 loss.<\/p>\n<p>There is no cost associated with this options structure, but the exchange will require a margin deposit to cover potential losses. Keep in mind that the minimum options trade on most derivative exchanges is 0.10 BTC contract.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>author<\/em><\/a><em> 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<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/how-cautiously-bullish-bitcoin-traders-use-options-to-maintain-btc-exposure\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# How cautiously bullish Bitcoin traders use options to maintain BTC exposure &#8221; Bitcoin (BTC) traders appear undecided on the next step and this is reflected in the price oscillating between $58,400 and $63,400 over the last 14 days. There are some bearish signals coming from the United States regulatory front, but at the same&#8230;<\/p>\n","protected":false},"author":1,"featured_media":363775,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTEvZGYyY2NkMWMtYjQ4NS00OTQwLWIzOTktNjQwNjhjNDhhYjcyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81209,74937,74858,74863,75012,110520,74939,10574,73785],"class_list":["post-363774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-options","tag-bitcoin-price","tag-bitcoin-regulation","tag-cryptocurrencies","tag-derivatives","tag-how-to-crypto","tag-market-analysis","tag-education","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/363774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=363774"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/363774\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/363775"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=363774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=363774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=363774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}