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Using a Bitcoin Call Butterfly to Target a Rally Near $72,000

Article Deribit Insights
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Summary

This trade note outlines a bullish Bitcoin options position built from three call strikes expiring August 9, 2024. It buys one $70,000 call, sells two $72,000 calls, and buys one $74,000 call. The structure has a stated debit of $134 per BTC and a maximum profit of $1,866 per BTC if Bitcoin settles at $72,000 at expiry. The loss is limited to the debit paid, while profit falls away if the settlement price moves above or below the central strike.

The rationale combines a technical breakout above a cited supply zone, a flag and pole pattern, open interest concentrated at the central strike, recent Bitcoin ETF inflows, and possible policy or regulatory catalysts. Those catalysts include a potential Ethereum ETF launch and rumored developments involving the SEC, Ripple, and Bitcoin as a strategic reserve asset. These are presented as market expectations and speculation, not confirmed outcomes. The note provides no backtest or probability estimate, and its setup is tied to a specific expiry and strike range; the stated payoff depends on the options pricing and BTC level at expiry.

Key ideas

  • A call butterfly buys calls at two outer strikes and sells twice as many calls at the middle strike.
  • The example aims for maximum profit if Bitcoin expires at the $72,000 middle strike.
  • The stated maximum loss is limited to the initial $134 per BTC debit.
  • The bullish thesis draws on a technical breakout, options positioning, ETF inflows, and possible news catalysts.
  • The setup is a defined-expiry trade whose outcome depends on Bitcoin settling near the target strike.

Tags

CryptoOptionsTechnical indicatorsBreakoutRisk management

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