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Using a Bitcoin Put Ratio Spread for a Decline Toward Support

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Summary

The article presents a bearish BTC options trade based on resistance, negative spot ETF flows, and a view that price may test support near $59,000. The proposed put ratio spread buys one out-of-the-money $61,000 put and sells two $59,000 puts with the same expiry. The stated rationale is that the short strike marks a potential support area and that expiry near this level would produce the trade’s maximum profit.

The example gives a $15 per BTC initial debit and a stated maximum profit of $1,985 per BTC. The payoff is concentrated around the lower strike: if BTC falls substantially below it, the two short puts create losses that can exceed the initial debit. The article therefore highlights a key risk of ratio spreads, despite the small entry cost. The trade reflects a dated market view and a specific option setup; the excerpt does not establish that the support level or ETF-flow interpretation will persist, and it cautions against using the analysis as the sole basis for a decision.

Key ideas

  • A put ratio spread buys one higher-strike put and sells multiple lower-strike puts at the same expiry.
  • The example uses one $61,000 put and two $59,000 puts on BTC.
  • The trade thesis relies on resistance, negative spot ETF flows, and possible support near $59,000.
  • The article states a $15 per BTC debit and $1,985 per BTC maximum profit.
  • Losses can exceed the initial debit because the position is net short puts below the lower strike.

Tags

CryptoOptionsDerivatives pricingRisk management

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