BTC Put Ratio Spread
Updated
BTC-28FEB20 Put Ratio Spread
Sell 2x 2/28 6500P for 0.0430 ($315)
Buy 1x 2/28 7000P for 0.0700 ($510)
Net Credit: 0.0160 ($120)
Max Profit (if pinned @ 6500): Approximately 0.0850 ($620)
Margin Requirements: 0.2700 ($1975) due to Deribit not having complex orders
Break Even: $5,880
This is a neutral to bullish trade. Anything above 7000 and profits are capped at the credit received. Max profit is actually achieved if I am wrong directionally and we dump to 6500.
Adds some positive portfolio delta and brings in about $4.55 of positive daily theta.
If we see a strong move to the upside, I will look to buy a 6000P for less than the credit I received for the trade which will cut into profit potential but also remove all risk from the trade turning it into a free butterfly spread.
Any price action within the body (6000-7000) I will sit tight and let theta decay work in my favor. Would close out trade at 25% max profit (0.02125/$155).
This is a fairly high probability trade but will likely take a bit of time before showing decent profit. Expected move for this cycle is about +/- $1,350 so this can stay profitable even if we see a full move to downside. Will likely close out though if we see 6k breached.
Sell 2x 2/28 6500P for 0.0430 ($315)
Buy 1x 2/28 7000P for 0.0700 ($510)
Net Credit: 0.0160 ($120)
Max Profit (if pinned @ 6500): Approximately 0.0850 ($620)
Margin Requirements: 0.2700 ($1975) due to Deribit not having complex orders
Break Even: $5,880
This is a neutral to bullish trade. Anything above 7000 and profits are capped at the credit received. Max profit is actually achieved if I am wrong directionally and we dump to 6500.
Adds some positive portfolio delta and brings in about $4.55 of positive daily theta.
If we see a strong move to the upside, I will look to buy a 6000P for less than the credit I received for the trade which will cut into profit potential but also remove all risk from the trade turning it into a free butterfly spread.
Any price action within the body (6000-7000) I will sit tight and let theta decay work in my favor. Would close out trade at 25% max profit (0.02125/$155).
This is a fairly high probability trade but will likely take a bit of time before showing decent profit. Expected move for this cycle is about +/- $1,350 so this can stay profitable even if we see a full move to downside. Will likely close out though if we see 6k breached.
Trade closed: target reached
BTC-28FEB20 Put Ratio SpreadSell 2x 2/28 6500P for 0.0430 ($315) **CLOSE FOR 0.0175 ($140)**
Buy 1x 2/28 7000P for 0.0700 ($510) **CLOSE FOR 0.0290 ($235)**
Net Debit: 0.0060 ($45)
Profit: 0.0100 ($80)
With as much time value left in these contracts as there is, there really isn't much more profit to be had out of this position without sitting on it for another 3 weeks or so. Moved in the direction I wanted almost right away so gonna take profits and move onto next play.
An alternative strategy would be to buy the 2/28 6000 put for less than the original credit received (which can currently be done) which would remove all risk from the trade. But the payoff wouldn't been seen for a couple more weeks and only start to really make it worth it on a dump towards 6500.
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