Skip to content
All library documents

Using a Bitcoin Bear Put Spread After a Support Breakdown

Article Deribit Insights
Read the original

Summary

The article presents a bearish Bitcoin options trade after the market fell below a cited support level amid ETF outflows. Its rationale is that weak price structure could lead to a test of a lower demand area, while acknowledging the possibility of a bounce. The proposed position buys a put and sells a lower strike put with the same expiry, reducing the upfront premium compared with buying the higher strike put alone.

For the stated August expiry, the example uses the 58,000 and 57,500 strikes, with a net debit of $140 per BTC and maximum profit of $360 per BTC. The maximum loss is limited to the debit, and the full stated profit requires BTC to finish at or below the short strike at expiry. The thesis rests on a specific market snapshot and ETF flow report; it is not presented as a backtested rule. The page also cautions that the analysis is informational and should not be the sole basis for a trade.

Key ideas

  • A bear put spread combines a purchased put with a sold put at a lower strike and the same expiry.
  • The example uses 58,000 and 57,500 strikes and requires a net debit of $140 per BTC.
  • Maximum profit is stated as $360 per BTC if BTC expires at or below 57,500.
  • The maximum loss is limited to the initial debit.
  • The bearish thesis relies on a reported support break and ETF outflows, not a tested signal.

Tags

CryptoOptionsDerivatives pricingRisk management

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