Bitcoin Call Butterfly: A Defined-Risk Trade for a Short-Term Rally

Summary

This trade note explains a call butterfly for a trader with a short-term bullish Bitcoin view. The structure buys one lower-strike call, sells two calls at a middle strike, and buys one call at a higher strike, all with the same expiry. The example uses March 29, 2024 options with strikes at $77,000, $80,000, and $85,000. Its stated net debit is $60 per BTC and maximum profit is $2,940 per BTC; the payoff is greatest if Bitcoin finishes near the short-call strike at expiry. The initial debit limits the stated downside.

The rationale cites a break above a four-hour triangle resistance area near $68,000 and open interest at $80,000 as a possible resistance concentration. Those chart and positioning observations are not independently tested in the document, and the example is tied to a specific historical expiry and market setup. The described payoff is therefore conditional on the underlying price and expiry, while transaction costs and execution effects are not discussed.

Key ideas

• A call butterfly buys one lower-strike call, sells two middle-strike calls, and buys one higher-strike call.
• The example seeks a short-term bullish move while concentrating maximum profit near the $80,000 middle strike at expiry.
• The stated maximum loss is limited to the strategy’s $60 per-BTC net debit.
• The trade rationale relies on a short-term chart breakout and open interest near the middle strike.
• The example is specific to its March 2024 expiry and does not establish that the setup will recur profitably.

Tags

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