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Using a Bitcoin Put Butterfly for a Move Toward a Target Price

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Summary

The document presents a bearish Bitcoin options idea based on a rejection near resistance and a claimed breach of demand zones. Its proposed trade is a put butterfly: buy one higher-strike put, sell two puts at a middle strike, and buy one lower-strike put, using contracts expiring August 16, 2024. The stated strikes are $55,000, $54,000, and $53,000, with the short puts centered on a $54,000 target at expiry.

The article reports a maximum profit of $962 per BTC and a strategy debit of $38 per BTC. It says the maximum payoff occurs if Bitcoin settles at the middle strike on expiration, while the debit limits the loss if the market rises. The trade thesis rests on the article’s interpretation of a four-hour chart and a failed breakout; no statistical testing or probability estimate is supplied. Payoff depends on expiration price and the quoted option prices, and the source cautions that its analysis should not be the sole basis for a decision.

Key ideas

  • A put butterfly combines one long higher-strike put, two short middle-strike puts, and one long lower-strike put.
  • The example centers the strikes on a $54,000 Bitcoin expiry target.
  • The stated maximum profit is $962 per BTC, while the debit and maximum stated loss are $38 per BTC.
  • The bearish rationale is a rejected breakout near resistance and breached demand zones, based on chart interpretation.
  • The proposed payoff is concentrated around the middle strike at expiration.

Tags

CryptoOptionsVolatilityRisk management

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