A bullish trade that has recurred in the market for crypto-call options is a bet that the cost of the Bitcoin will surpass $ 50,000 by that time next year. Now, when the cost of the Bitcoin has the impetus, the bulls again place bullish bets. The most hostile deals look as at first sight in the crypto market where the risk/profit profile differs from the spot market. Now that the cost of the Bitcoin has produced a return of approximately 130% since the beginning of the year, derivatives retailers tend to again work with it.
According to a report in the Wall Street Journal quoted by CFTC LedgerX, although the stake may seem small compared to $ 25 billion in BTC’s trade over the past 24-hour period, it is significant because LedgerX has for the first time witnessed call activity in the $ 50,000 range BTC for more than six months. Last month, LedgerX watched BTC options for BTC $ 25,000, according to LedgerX co-founder and Chief Operating Officer Juthica Chou, who is also a Goldman Sachs alum quoted in the WSJ.
Until the expiration date of June 2020, the call option gives the trader the right, but not the obligation to buy BTC at the price. If the cost of the Bitcoin rises above this level, the trader will earn a good profit. If the cost of the Bitcoin falls, they risk losing only what they have given them for the contract of options. According to Chou in a recent interview with Anthony Pompliano, LedgerX counts among its institutional client’s cryptographic funds, miners, Bitcoin, hedge funds, commercial companies. As the $ 50,000 callback option has appeared again, it’s not the first time traders have made such a bet.
During the Crypto bull in 2017, BlockTower Capital also used LedgerX to bet almost $ 1 million that BTC’s price would reach $ 50K by the end of 2018. Ari Paul twitted, “One thing to understand with options: a deep out of the money call is not a bet that something *will* happen, it’s a bet that something *might* happens.
One thing to understand with options: a deep out of the money call is not a bet that something *will* happen, it's a bet that something *might* happen. Risk a little to win a lot.
— Ari Paul ⛓️ (@AriDavidPaul) December 21, 2017
Risk a little to win a lot.” BlockTower Capital CIO Ari Paul told the WSJ: “I certainly would caution nonprofessionals against trading options.” But now that Bitcoin is again in the flow with several catalysts that fuel inertia, the call option can reach a much more lucrative output this time.