Bitcoin Experts Favor Call Spreads for Next Price Rally

Bitcoin’s return toward $80,000 has investors who missed the initial advance looking for a more disciplined entry. Experts favor call spreads, which combine the purchase of a lower-strike call with the sale of a higher-strike call. A trader might buy an $80,000 call and sell a $90,000 call, limiting the maximum loss to the premium paid while capping profit at the difference between the strikes, less that cost.

On Aug. 27, Deribit Chief Commercial Officer Jean-David Pequignot said call spreads remained attractive for upside exposure into September while preserving defined risk ahead of Federal Reserve and inflation catalysts. Markus Thielen, founder of 10x Research, proposed holding bitcoin and selling a $90,000 September call, or using an $85,000/$95,000 September call spread. The bullish positioning comes with a seasonal warning: bitcoin has averaged a 3% September decline since 2013, according to Coinglass.