Aug 8, 2018

What's The Opposite Of "To The Moon" ?

As BTCUSD rate is falling ( down to the Earth? ) prudent traders know that there are many ways to play the market. Of course people who were short futures, or long puts are able to realize gains, but I would like to suggest other ways to play the market as well.

1 - There is a limited downside to the market, and steep call skew. If you think that market will recover, you can purchase at calls, financing them with 2 otm calls. For example, end of August 6500 / 7500 spread, for a small debit.

2 - If you think the market is going lower, consider buying near put, financed by otm call. 5000 / 8000 end of August spread looks reasonable, and at this futures level quite closer to the down strike.

My preferred way to spread the market is by not by vertical spreads, but rather with calendar and diagonal spreads. I will be discussing these strategies in the future, but in the meantime wanted to share some news: it seems like after recent Bitmex outage, Deribit has been gaining new futures traders. While I typically don't write about this - besides options, Deribit is a solid and stable futures platform.

1 comment:

  1. What vendor are you using for options? I assume the underlying is bitcoin and not bitcoin futures...