Using a Call Butterfly to Target BTC Resistance Near a Strike

Summary

The document presents a defined-risk BTC call butterfly for a market view that price could recover toward, but have difficulty moving above, a resistance area. The rationale combines a reported recovery from a prior low, positive spot ETF inflows during the week, chart resistance, and high options open interest at the central strike. The example buys one lower-strike call, sells two calls at the middle strike, and buys one higher-strike call, all with the same expiry. The structure is designed to earn its maximum payoff if BTC settles at the middle strike at expiry.

For the stated strikes and premiums, the report gives a maximum profit of $950 per BTC and a net debit—and therefore stated maximum loss—of $50 per BTC. Profit is concentrated around the central strike and declines if the expiry price is materially above or below it. The example is tied to a particular expiry and market context; it does not provide a probability of profit, transaction costs, liquidity analysis, or independent evidence that the resistance view will hold. The author cautions against using the report as the sole basis for a trade.

Key ideas

• A call butterfly buys calls at two outer strikes and sells two calls at the middle strike.
• The example is structured to reach maximum profit if BTC expires at the central $67,000 strike.
• The stated maximum loss is limited to the initial $50 per BTC debit.
• The market thesis relies on reported spot recovery, positive ETF inflows, chart resistance, and open interest at the central strike.
• The payoff is sensitive to the expiry price, and the report does not quantify trade costs or probability of profit.

Tags

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