{"id":467344,"date":"2022-06-24T23:04:05","date_gmt":"2022-06-24T20:04:05","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/heres-how-pro-traders-could-use-bitcoin-options-to-buy-the-20k-btc-dip\/"},"modified":"2022-06-24T23:04:05","modified_gmt":"2022-06-24T20:04:05","slug":"heres-how-pro-traders-could-use-bitcoin-options-to-buy-the-20k-btc-dip","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/heres-how-pro-traders-could-use-bitcoin-options-to-buy-the-20k-btc-dip\/","title":{"rendered":"# Here\u2019s how pro traders could use Bitcoin options to buy the $20K BTC dip"},"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-6a240a63a4cd7\" 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-6a240a63a4cd7\" 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-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/heres-how-pro-traders-could-use-bitcoin-options-to-buy-the-20k-btc-dip\/#%E2%80%9D_Heres_how_pro_traders_could_use_Bitcoin_options_to_buy_the_20K_BTC_dip_%E2%80%9C\" >&#8221; Here\u2019s how pro traders could use Bitcoin options to buy the $20K BTC dip &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/heres-how-pro-traders-could-use-bitcoin-options-to-buy-the-20k-btc-dip\/#The_%E2%80%9CIron_Condor%E2%80%9D_provides_returns_for_a_specific_price_range\" >The &#8220;Iron Condor&#8221; provides returns for a specific price range<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/heres-how-pro-traders-could-use-bitcoin-options-to-buy-the-20k-btc-dip\/#The_target_profit_area_is_23850_to_35250\" >The target profit area is $23,850 to $35,250<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Heres_how_pro_traders_could_use_Bitcoin_options_to_buy_the_20K_BTC_dip_%E2%80%9C\"><\/span>&#8221; Here\u2019s how pro traders could use Bitcoin options to buy the $20K BTC dip &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>Bitcoin hit a 2022 low at $17,580 on June 18 and many traders are hopeful that this was the bottom, but (BTC) has been unable to produce a daily close above $21,000 for the past six days. For this reason, traders are uncomfortable with the current price action and the threat of many CeFi and DeFi companies dealing with the loss of user funds and possible insolvency is weighing on sentiment.<\/p>\n<p>The blowback from venture capital Three Arrows Capital (3AC) failing to meet its financial obligations on June 14 and Asia-based lending platform Babel Finance citing liquidity pressure as a reason for pausing withdrawals are just two of the most recent examples.<\/p>\n<p>This <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> has caught the eyes of regulators, especially after Celsius, a crypto lending firm, suspended user withdrawals on June 12. On June 16, securities regulators from five states in the United States of America reportedly opened investigations into crypto lending platforms.<\/p>\n<p>There is no way to know when the sentiment will change and trigger a Bitcoin bull run, but for traders who believe BTC will reach $28,000 by August, there is a low-risk options strategy that yields a decent return with limited risk.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_%E2%80%9CIron_Condor%E2%80%9D_provides_returns_for_a_specific_price_range\"><\/span>The &#8220;Iron Condor&#8221; provides returns for a specific price range<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Sometimes throwing a &#8220;hail Mary&#8221; pays off by leveraging ten times via futures contracts. However, most traders are looking for ways to maximize gains while limiting losses. For example, the skewed &#8220;Iron Condor&#8221; maximizes profits near $28,000 by the end of August, but limits losses if the expiry is below $22,000.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/4e9e0556-0279-41fe-9207-278b1315dede.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin options Iron Condor skewed strategy returns. Source: Deribit Position Builder<\/em><\/figcaption><\/figure>\n<p>The call option gives its holder the right to acquire an asset at a fixed price in the future. For this privilege, the buyer pays an upfront fee known as a premium.<\/p>\n<p>Meanwhile, the put option provides its holder the privilege to sell an asset at a fixed price in the future, which is a downside protection strategy. On the other hand, selling this instrument (put) offers exposure to the price upside.<\/p>\n<p>The Iron Condor consists of selling the call and put options at the same expiry price and date. The above example has been set using the August 26 contracts, but it can be adapted for other timeframes.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_target_profit_area_is_23850_to_35250\"><\/span>The target profit area is $23,850 to $35,250<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To initiate the trade, the investor needs to short 3.4 contracts of the $26,000 call option and 3.5 contracts of the $26,000 put option. Then, the buyer needs to repeat the procedure for the $30,000 options, using the same expiry month.<\/p>\n<p>Buying 7.9 contracts of the $23,000 put option to protect from an eventual downside is also required. At another purchase of 3.3 contracts of the $38,000 call option to limit losses above the level.<\/p>\n<p>This strategy yields a net gain if Bitcoin trades between $23,850 and $35,250 on August 26. Net profits peak at 0.63 BTC ($13,230 at current prices) between $26,000 and at $30,000, but they remain above 0.28 BTC ($5,880 at current prices) if Bitcoin trades in the $24,750 and $32,700 range. <\/p>\n<p>The investment required to open this strategy is the maximum loss, hence 0.28 BTC or $5,880, which will h<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>en if Bitcoin trades below $23,000 or above $38,000 on August 26. The benefit of this trade is that a reasonable target area is covered, while providing a 125% return versus the potential loss.<\/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>\n<\/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 News 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\/here-s-how-pro-traders-could-use-bitcoin-options-to-buy-the-20k-btc-dip\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Here\u2019s how pro traders could use Bitcoin options to buy the $20K BTC dip &#8220; Bitcoin hit a 2022 low at $17,580 on June 18 and many traders are hopeful that this was the bottom, but (BTC) has been unable to produce a daily close above $21,000 for the past six days. For this&#8230;<\/p>\n","protected":false},"author":1,"featured_media":467345,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDYvZTk2MDVkYmEtY2YxMi00NTUyLWFlOWYtZTQ2ZjY0NjJlYmY5LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81209,74937,74863,74860,75012,110520,77595,107545,74939,79248,3123,73785,71407],"class_list":["post-467344","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-options","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-how-to-crypto","tag-lending","tag-liquidity","tag-market-analysis","tag-trading101","tag-leverage","tag-markets","tag-trading"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/467344","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=467344"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/467344\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/467345"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=467344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=467344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=467344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}