So, I am of the opinion that crypto is either going to the moon, or will die a quick and fiery death. I don't know the market well enough to have strong conviction either way. NOTE: This example is for the bitcoin commodity itself, not miners, custodians, operators, exchanges, etc.

This is a textbook "Strangle" trading scenario for me. Buying an equal amount of significantly out of the money calls and out of the money puts. Worst case is losing all your premium (coincidentally, also the most likely scenario). Best case is that one side or the other banks bigtime.

My problem - - I chose BITO as the trading vehicle, and despite listing options, Schwab won't execute the trade (because it's too thinly traded). Most of the other ETFs don't trade options, so I am at a loss as to how to get this or a similar trade executed.

BONUS Theoretical Trade: Also, I don't know why there isn't a good arbitrage trade between GBTC and other lower expense alternatives such as IBIT. The stated 1.50% vs. 0.12% expense ratios themselves could yield an enterprising trader a 1.38% available arbitrage return by going short GBTC/long IBIT. I realize that it won't work for a non-institutional investor given the capital required to make it meaningful, but is anyone aware of someone trading this concept?

I didn't post this on the various Bitcoin threads, as it's neither fanboy fiction or bitcoin hate. I just want to make money on a practical opportunity I perceive.

I'm going simple, just using IBIT which makes this easy. Bitcoin has been a viral subject for years, the ETF makes it more available and institutions are even getting in on the gig, the halving coming soon, FOMO.. will all drive the price imo.

So I'm making a cheap bet with about 1% of my total portfolio, that it doubles to tripples within a year or so. If/when that happens I'm selling my initial 1% so I'm net free on the rest, moon or crash to 0.

Worst case scenario is I loose 1%, but based on the things i said I don't see it happening in the near term.

I think bitcoin has a meme stock rise. It's got all the makings of a meme stock on steroids You've even got the youth calling gold, boomer coin

jamey said:

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I'm going simple, just using IBIT which makes this easy. Bitcoin has been a viral subject for years, the ETF makes it more available and institutions are even getting in on the gig, the halving coming soon, FOMO.. will all drive the price imo.

So I'm making a cheap bet with about 1% of my total portfolio, that it doubles to tripples within a year or so. If/when that happens I'm selling my initial 1% so I'm net free on the rest, moon or crash to 0.

Worst case scenario is I loose 1%, but based on the things i said I don't see it happening in the near term.

I think bitcoin has a meme stock rise. It's got all the makings of a meme stock on steroids You've even got the youth calling gold, boomer coin

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Thanks.

Well, that's half the equation - no arguments from me necessarily. However, it doesn't satisfy my desire for leverage and downside protection. I don't want to tie up a lot of capital in this trade, and I believe there is as good a chance of a large decline as a huge increase. I want to participate either way. I'm willing to lose if it stays near current prices.

Other ideas?

By the way, I reloaded the trade several times, and it finally accepted the order with Sept. 20th monthly expiration instead of Sept. 30th weekly options.

I'm on the clock!

Is there a reason you couldn't make the same plays with a crypto mining company instead like MARA, or a known bag holder like MSTR? Your overall gains or losses would likely be not as astronomical, but the premium might be better value because more people are trading them. I could be misunderstanding what you are doing.

Definitely Not A Cop said:

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Is there a reason you couldn't make the same plays with a crypto mining company instead like MARA, or a known bag holder like MSTR? Your overall gains or losses would likely be not as astronomical, but the premium might be better value because more people are trading them. I could be misunderstanding what you are doing.

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Very good question.

I want a pure play on the crypto itself. When you introduce a company into the equation, you are also getting a value (positive or negative) for their management ability, capital structure, governmental jurisdiction, tax status, and a whole lot more factors that I definitely don't have time or interest in studying.

I want a simple bet on a large move in either direction on the commodity. TO BE CLEAR, I'm not investing, this is simply a speculative trade.

Those instruments are not currently available.

The SEC in it's infinite wisdom has not allowed options on cryptocurrency. It's possible on a couple platforms using VPN.

TxAG#2011 said:

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Those instruments are not currently available.

The SEC in it's infinite wisdom has not allowed options on cryptocurrency. It's possible on a couple platforms using VPN.

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Well, I placed an order (didn't execute yet) for BITO options (without a VPN), so it looks very possible.

Have you looked at the CME group? They have had futures and options contracts for years now on Bitcoin natively outside of any ETF and have significant volume and open interest.

Implied vol of 100%+ on both sides of the trade is going to make it really hard to make money on this trade. You'll need a 20% move in either direction before the trade starts to pay off. To me it looks like the better deal is to play the role of the house and write the strangle instead of buying. MSTR implied vol is over 200% which would give a huge range to make still make money on the write side.

I been in MSTR for the past 3 years. Gains have been life chaning. Recently sold some MSTR and added to my bitcoin miner plays CLSK and BITF. I believe these miners will survive the halving and will be generating crazy revenues as Bitcoin prices rises. Lets go!!!!!!!