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Forward Curve - CALL WRITING STATEGYAs we’ve been having conversations with all kinds of players within the cryptosphere, we’ve noticed Index Fund managers as well Miners who are long-only are looking for additional sources of income. This piece will be to educate them in a potential CALL WRITING strategy that can satisfy their need for additional income. When entering a CALL WRITING program, one would typically sell the 20 to 30 delta out-of-the money calls somewhere between 3-6 months out. If the program outcome is successful, a fund will increase its yield by collecting the option premium. Let us walk through the potential trade and its outcomes: Assume you have a cost basis of $4,500 for your BTC. We would look at the BTC June (6/25/19) $6,000 Calls that are worth roughly $200. 1. If the underlying stays flat o Do nothing, sit back, and enjoy collecting the premium o At expiration (6/25/19), your cost basis would become $4,300 (original basis – premium = new basis) o Next Trade: analyze volatility curve and target appropriate calls to sell 2. If the underlying sells off to $2,500 (hypothetical) o You can ‘roll’ your short calls to a lower strike to increase the premium income making up for losses in the underlying asset. o Sell the $4,500 Call and buy back the $6,000 Call for a net spread of $100 ($100 is an assumption and would have other factors to dictate that price: time, vol, BTC price etc.) o At expiration (6/25/19), your cost basis would become $4,200 (original basis – total premium = new basis) 3. If the underlying rallies towards $6,000 (hypothetical) o You should roll the short calls ‘up-and-out’ (to a higher strike and a further month in the calendar year) o Hypothetically, we would try to buy back the June $6000 calls and sell December calls (maybe $9,000 strike) for the same premium. o The cost basis would remain the same @ $4,300, however you would not get called out of your BTC length if June settled above $6,000 When the premium on the short calls are miniscule, you can decide to buy them back, or let them expire. After this decision is made, you can start this process over and sell more calls to continue lowering the cost basis of your BTC. The risk to this strategy is that you are short calls that, if end up in-the-money, can be exercised – meaning you would have to deliver your BTC to the call purchaser. To prevent this from happening one should be rolling the calls ‘up-and-out’. If the opportunity to do this is missed (let’s say BTC gapped from $4,000 to $8,000 overnight), you would end up cutting your profits short. If this income generating program is something you would consider establishing, please reach out to us and let us know so we can hop on a call to discuss further. Contacts Tim Kelly Founder and CEO tkelly@bitooda.io Brian Donovan Executive VP of Institutional Sales bdonovan@bitooda.io Dr. Ilya Kurland Chief Derivatives Strategist ilya@bitooda.io
CME:BTC1!
by BitOoda_LLC
NE In charting we must trust11/19 - OPTION PLAY *Queued, 2 contracts* NE 11/23 4.50 CALL dip buy 0.09 (0.10) IV 63.29% Volume 509 Open Interest 529 sell at 0.21 share price 4.65 I'm hoping for a play here. If i crash and burn, at least i made the jump. Why do i have faith in NE right now? #1 MACD about to cross north #2 RSI is basically at an oversold point #3 $4.50 is very close to current closing price #4 The $4.37 support line has been tested many times over the last 10ish days and is prepared to make a move. I just hope it moves north. *Let's see what happens!*
NYSE:NELong
by mrmaximo74
2
$SPY $SPX $ES1! Another ATH this year - earnings season strong!I reviewed my previous SPY analysis and made a few crucial mistakes. Do not follow my previous spx, spy ideas. I spent more time studying the charts, the VIX and the products inside S&P 500. I'm expecting another all time high this year before a larger correction. Here is the chart and targets I'm quite confident with and will be playing. Follow along for updates. I'm expecting the correction to start end of Nov or early Dec. I'm betting on 26-29 November. Good luck! PS. If you see my other SPY, SPX, ES Analysis on Trading View. Ignore it. I've closed older ideas.
AMEX:SPY
by starman01
1