Risk reversal: buy the deep
May 19, 2021 will go down in crypto market history as the day of shock, pain and the biggest fall.
After BTC collapsed 35% in just 2 hours, breaking through a strong resistance level of 40,000 and testing the 30,000 level, the rest of the crypto market followed suit. A 50% slump from the peak value is the usual market norm for most altcoins today. However, this situation of mass liquidations in addition to the stress and pressure allows you to enter the market at much more interesting prices.
The options market provides an opportunity to participate in price movements with far less capital requirement. For optimal entry, you can use Risk Reversal, when selling PUT option allows you to buy CALL option.
For BTC, by the way, it is possible to take a long position of double the amount:
- SELL PUT option with an execution date of June 25, an execution price of 28,000 and a premium of 2,800.
- BUY two CALL options with an execution price of 25 June, an execution price of 50,000, and a premium of 1,400*2=2,800.
For ETH, the relevant levels at the moment would be:
- SELL PUT option with an execution date of June 25, an execution price of 2,080 and a premium of 320
- BUY CALL option with execution date of June 25, execution price of 3 200 and premium 314.
Thus we have the possibility to participate in the price growth without investing our own money.
The third asset that can be considered for the application of this option trading scheme is BNB.
The levels of transactions are as follows:
- SELL PUT options with an execution date of June 25, execution price of 300 at a premium of 45
- BUY CALL option with the same execution date, execution price 420 and premium 44
The current situation offers unique opportunities for profitability. However, it also carries significant risks. In general, the use of options allows trading with much greater control over volatility and liquidity and far less risk.
If you have any questions — reach out to us via:
Telegramm — @DeltaTheta_Research
email — Research@deltahteta.tech
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