Using a Bitcoin Call Ratio Spread for a Short-Term Bullish View
Summary
The document outlines a short-term bullish Bitcoin options trade: buy one out-of-the-money call at a lower strike and sell two calls at a higher strike with the same expiry. Its example uses March 2024 options with strikes at $75,000 and $77,000, and describes a $10 per BTC net debit. The stated maximum profit is $1,990 per BTC if Bitcoin finishes at the higher strike at expiry; losses on a decline are limited to the initial debit.
The bullish case cites slowing Bitcoin ETF outflows followed by a reported $418 million net inflow on March 26, a breakout from a triangle pattern, and former resistance acting as support on the four-hour chart. It also points to open interest at the two strikes as a possible influence on price near expiry. These are contemporaneous observations, not evidence from a systematic backtest. The payoff can become exposed to losses if Bitcoin rises sufficiently above the short calls, so the limited downside claim applies to a downturn, not every possible expiry price. The example is dated and does not establish that the setup remains relevant in other market conditions.
Key ideas
- A call ratio spread buys one call and sells multiple higher-strike calls with the same expiry.
- The example targets maximum profit if Bitcoin expires at the short-call strike.
- The stated net debit limits losses if Bitcoin falls below the position's strikes.
- A sufficiently large rally beyond the short calls can create losses.
- The bullish rationale combines ETF flow data, chart levels, and open interest observations.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.