Navigating Bitcoin’s Price Swings with the Call Butterfly Strategy
From Deribit by Anand Raj
Trade Strategy: Call Butterfly
View: Moderately Bullish View on BTC
- Buy 1x BTC-22MAR24-72,000-C @ $1050
- Sell 2x BTC-22MAR24-74,000-C @ $650
- Buy 1x BTC-22MAR24-76,000-C @ $390
Target: Spot level < $74,000
Payoff chart at Expiry
- Max Profit: $1860/BTC
- Debit of Strategy: $140/BTC
Why are we taking this trade?
After reaching unprecedented highs, Bitcoin experienced notable pullbacks to a crucial support level of 64,560 precisely to the Demand zone / Support area formed at the 4-hour timeframe.
With these fluctuations in Bitcoin’s price, the call butterfly strategy presents an appealing chance to capitalize on potential profits.
In the event of a downturn, losses are limited to the initial debit of $140. Notably, significant open interest is observed at both $74,000 and $76,000, suggesting these levels could serve as resistance points, potentially maximizing profits around $74,000.
How to take this trade on Deribit?
Step 1: Go to Combo books under the Strategy tab create combo.
Step 2: Click RFQ and send your order to the Combo List.
Step 3: Go to Combo list (BTC), click on your Strategy and execute.
