For the past 29 days, Bitcoin (BTC) has hovered between $ 31,000 and $ 36,000 due to the effects of the Chinese ban, and Grayscale’s release of $ 1.4 billion in GBTC shares continues to put the market under pressure.

The Chinese government has taken a number of measures to restrict the mining and trading of cryptocurrencies by ordering the immediate closure of some operations and ordering banks in the country to freeze accounts.

Meanwhile, Grayscale and its $ 21 billion trust GBTC are facing a troubling period as the institutional lock-up period of six months ends, causing a potential $ 1.4 billion sell-off. It should be noted, however, that 654,000 managed BTC will not be moved in the market.

With the impact of these factors, Bitcoin price has been stuck in a range for months and, in general, many traders have stood out there waiting for clearer signals.

While seasoned traders use perpetual futures, most are unaware of the additional tools they can use to maximize their profits. This is especially true when the market is moving sideways, creating a perfect scenario for options trading.

For example, one can develop an option strategy to maximize profits even when the price is not moving much.

By using both call and put options, a trader can develop strategies to profit when the market moves sideways. They can be used in bullish and bearish cases and most derivatives exchanges offer these option platforms.

Iron Condor’s strategy is used in a narrow range

Iron Condor is a neutral strategy that sells a put at $ 32,000 to get positive exposure to Bitcoin while simultaneously selling a call at $ 34,000 to reduce profits above that level. These transactions are simulated when the Bitcoin price is $ 31,750 and expires on August 27th (40 days).

Estimated profit / loss | Source: Deribit Position Builder

Two losing positions (small odds) are required to protect the position if the price falls to $ 28,000 or rises above $ 38,000. These additional trades give the traders security and at the same time reduce the margin requirements (collateral).

Regardless of what price Bitcoin hits between $ 29,200 (8% down) and $ 36,660 (+ 15%) on Aug 27, the results are positive. The maximum profit was between $ 31,800 and $ 34,200, resulting in a bitcoin profit of 0.09. On the other hand, the worst result is a loss of 0.045 Bitcoin.

A similar strategy could be implemented for Ethereum (ETH) options, but traders should be aware of the London hard fork on August 4th, which could lead to more volatility.

SN_Nour

According to Cointelegraph

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page trang