ETH Put Butterfly for a Targeted Post-ETF Pullback

Summary

The article presents a put butterfly as a defined-risk strategy for a modest ETH decline toward a target price. Its example buys one August 9, 2024 $3,400 put, sells two $3,300 puts, and buys one $3,200 put. The stated debit is $9.5 per ETH, with maximum profit of $90.5 per ETH if ETH settles at $3,300 at expiry. The payoff is concentrated around that middle strike, so a much smaller or larger move can reduce the result.

The bearish rationale is that ETH did not rally significantly after spot ETF approval, had underperformed other cryptocurrencies over the prior week, and had a put-call ratio of 1.19 for the cited expiry. The author also points to past corrections after several crypto product listings and technical selling pressure, projecting a move to $3,300 support. Historical examples and options positioning offer context but do not establish that the pattern will repeat. The proposed trade is dated and conditional, and the article says the report should not be used as the sole basis for a trading decision.

Key ideas

• A put butterfly buys an upper-strike put, sells two middle-strike puts, and buys a lower-strike put.
• The example targets an ETH expiry price of $3,300, where it states maximum profit of $90.5 per ETH.
• The stated maximum loss is the $9.5 per ETH debit.
• The bearish case cites limited price response to ETF approval, relative underperformance, put-call positioning, and prior post-listing corrections.
• The payoff is most favorable near the middle strike, and the cited historical pattern does not guarantee a repeat.

Tags

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