Using a Bitcoin Call Ratio Spread for a Move Toward Resistance

Summary

This trade idea links a short-term bullish view on Bitcoin to a call ratio spread. After a sharp sell-off, the author notes that BTC rebounded from a pivot and held a lower-timeframe demand zone, suggesting a possible move toward resistance near $62,000. The proposed position buys one out-of-the-money call and sells two calls at a higher strike with the same expiry. The example uses August 16, 2024 options, with the long call at $60,000 and the two short calls at $62,000.

The payoff is described as reaching its maximum if BTC expires at the higher strike, with an initial net credit in the example. The article warns that the structure has net short call exposure and can incur significant losses if the underlying rises sufficiently beyond the target area. The setup depends on the support interpretation and a specific expiry; it provides no probability analysis or backtest. The stated payoff figures describe the example and should not be treated as evidence that the forecast or trade will succeed.

Key ideas

• The trade thesis expects a rebound from support to carry BTC toward resistance near $62,000.
• A call ratio spread buys one lower-strike call and sells two higher-strike calls at the same expiry.
• The example targets maximum profit at the short-call strike on expiration.
• The strategy collects an initial credit in the example but retains substantial upside risk above the target.
• The setup is a dated market view without backtest or probability estimates.

Tags

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