Bitcoin Call Butterfly: A Defined-Risk Strategy Around a Target Price

Summary

The article describes a bullish call butterfly spread for Bitcoin, framed around a breakout from a symmetrical triangle and increased open interest at the middle strike. The position buys one lower-strike call, sells two calls at a higher strike, and buys one call at a still higher strike, all with the same expiry. Its payoff is concentrated around the short-call strike, so the trade suits a view that Bitcoin may rise toward that level rather than a view of an unlimited rally.

The example uses calls at $76,000, $78,000, and $80,000 for an April 12 expiry. The stated maximum profit is $1,940 per BTC and the debit is $60 per BTC; maximum profit occurs if Bitcoin settles at $78,000, while the initial debit limits the loss. The breakout, follow-through, and strike-level open interest are the article’s rationale, not evidence from a tested strategy. The payoff depends on expiry price and execution costs, and the example is dated and should not be read as a current trade setup.

Key ideas

• A call butterfly buys an outer call at each wing and sells two calls at the middle strike.
• The example centers the position on a $78,000 Bitcoin expiry price.
• The stated maximum profit occurs at the middle strike, while the initial debit limits loss.
• A triangle breakout and elevated open interest support the article’s bullish rationale.
• The setup expresses a targeted price view and is sensitive to expiry price.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.