Here’s how pro traders use Bitcoin options to profit even during a sideways market
Categories: Bitcoin
How to profit in a sideways market The long butterfly strategy allows a trader to profit even if Bitcoin's price remains flat. However, it's important to remember that options have a set expiry date. This means the desired price outcome must happen during a specified period.The trader should buy 4.8 BTC worth of $52,000 call options and 3.9 BTC at $55,000, balancing out the risk above this price. The gains can be four times higher than the potential loss As the estimate above shows, any outcome between $46,700 (down 1.5%) and $53,500 (up 12.9%) yields a net gain. The best possible outcome happens at $50,000 and results in a 0.47 BTC net gain. Meanwhile, this strategy's maximum loss is 0.11 BTC if the price on April 29 trades below $46,000 or above $55,000.The allure of this butterfly strategy is the trader can secure gains that are 6 times larger than the maximum loss. Overall it yields a much better risk-reward versus leveraged futures trading, considering the limited downside.This options strategy trade provides upside even if Bitcoin's price remains flat and the only upfront fee required is 0.11 BTC, which also reflects the maximum loss.