This bullish Ethereum options trade targets $3.1K ETH price with zero liquidation risk

Ether terms (ETH) spent the past 2 months stuck successful a rut and adjacent the astir bullish trader volition admit that the anticipation of trading supra $4,400 successful the adjacent mates of months is dim. 

Of course, cryptocurrency traders are notoriously optimistic and it is not antithetic for them to expect different $4,870 all-time high, but this seems similar an unrealistic outcome.

Despite the existent bearish trend, determination are inactive reasons to beryllium moderately bullish for the adjacent mates of months and utilizing a “long condor with telephone options” strategy mightiness output a affirmative outcome.

Options strategies allows the capitalist to acceptable upside limits

Options markets supply much flexibility to make customized strategies and determination are 2 instruments available. The telephone enactment gives the purchaser upside terms protection, and the protective enactment enactment does the opposite. Traders tin besides merchantability the derivatives to make unlimited antagonistic exposure, akin to a futures contract.

Ether options strategy returns. Source: Deribit Position Builder

This agelong condor strategy has been acceptable for the March 25 expiry and uses a somewhat bullish range. The aforesaid operation tin besides beryllium applied for bearish expectations, but this script assumes that astir traders are looking for upside.

Ether was trading astatine $2,677 erstwhile the pricing took place, but a akin effect tin beryllium achieved starting from immoderate terms level.

The archetypal commercialized requires buying 5.14 ETH worthy of $3,000 telephone options to make a affirmative vulnerability supra this terms level. Then, to bounds gains supra $3,500 the trader needs to merchantability 4.4 ETH contracts of the $3,500 call.

To implicit the strategy, the trader needs to merchantability 6.65 ETH contracts of the $4,000 call, limiting the gains supra specified a terms level. Lastly, a $4,500 upside extortion telephone for 5.91 ETH is needed to bounds the losses if Ether unexpectedly skyrockets.

The strategy aims for a steadfast 3.2 to 1 nett to nonaccomplishment ratio

The strategy mightiness dependable analyzable to execute, but the borderline required is lone 0.175 ETH, which is besides the max loss. The imaginable nett net happens if Ether trades betwixt $3,100 (up 15%) and $4,370 (up 63%).

Traders should retrieve that it is besides imaginable to adjacent the presumption up of the March 25 expiry. In this strategy, the maximum summation occurs betwixt $3,500 and $4,000 astatine 0.56 Ether, which is much than 3 times higher than the imaginable loss.

Unlike futures trading, this strategy gives the holder bid of caput due to the fact that determination is nary liquidation risk. It is besides worthy noting that astir derivatives exchanges judge orders arsenic debased arsenic 0.10 ETH contracts, meaning a trader could physique the aforesaid strategy utilizing a smaller amount.

The views and opinions expressed present are solely those of the author and bash not needfully bespeak the views of Cointelegraph. Every concern and trading determination involves risk. You should behaviour your ain probe erstwhile making a decision.