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Using an ETH Call Ratio Spread Around a $2,900 Resistance Level

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Summary

The article outlines a bullish-to-neutral ETH options setup for an expiry on August 30, 2024. It proposes buying one out-of-the-money $2,800 call and selling two $2,900 calls with the same expiry. The stated rationale combines a pattern of higher highs and higher lows with repeated minor rejections at a price flip zone, a supply area near $2,900, and options data identifying $2,900 as the expiry’s maximum pain point. The suggested outcome is strongest if ETH expires at that level; the article reports a $5.75 per ETH initial credit and $105.75 per ETH maximum profit.

The structure has short call exposure above the higher strike, so losses can become significant if ETH rises sharply. Its payoff depends on the underlying price at expiry and the option premiums paid or received; the cited market structure and maximum pain estimate are not guarantees of price behavior. The article presents a dated example, not evidence from backtesting or a general-purpose recommendation.

Key ideas

  • A call ratio spread buys one lower-strike call and sells two higher-strike calls for the same expiry.
  • The example uses ETH calls at $2,800 and $2,900 with an August 30, 2024 expiry.
  • The trade rationale combines a higher-highs and higher-lows pattern, repeated resistance, a supply zone, and an options-derived maximum pain level.
  • The article identifies expiry near $2,900 as the maximum-profit outcome for its example.
  • Selling two calls creates material upside risk if ETH rises well above the higher strike.

Tags

CryptoOptionsVolatilityRisk management

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