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The world of Bitcoin and cryptocurrencies, and smart investors, are constantly looking for new ways to maximize their profits. A new strategy spotlighted by 10X Research promises to deliver optimal returns to Bitcoin holders. This bold approach, called the “covered strangle” method, is particularly noteworthy.
Understanding the “Covered Strangle” Law
The “covered strangle” method combines the sale of a call and a put option on the same underlying asset (in this case, Bitcoin). This strategy allows investors to collect a premium on both options, thus increasing their overall yield. But how does it actually work?
By selling a call option, an investor can protect against rising prices while also securing additional income through the premium received. At the same time, selling a put option provides compensation against falling prices and also earns a premium. By combining these two positions, an investor can benefit from a dual stream of income while reducing the impact of extreme market fluctuations.
Marcus Thielen of 10X Research recommends a specific tactical approach: selling call options with a strike price of $100,000, roughly 50% above the current Bitcoin price, and put options with a strike price of $50,000, which are set to expire in December 2024, reflecting the long-term profit outlook.
Maximizing profits with a long-term vision
The “covered strangle” strategy is particularly well suited to a bull market in which Bitcoin's price is expected to rise gradually. This approach relies on low implied volatility, making it an ideal recipe for steady, sustainable growth.
This way, investors can benefit from solid protection against downside risks of up to 17%, while increasing their potential yield based on Bitcoin's performance until December 2024. Indeed, if Bitcoin's price remains stable or increases slightly, the premium collected on the option will be added to the profit of the main investment.
However, it is important to manage the risks associated with this strategy. If Bitcoin falls significantly below the strike price of the put options ($50,000), a long Bitcoin position and a short put option position could result in significant losses. It is therefore important that investors monitor the markets closely and adjust their strategies accordingly.
Current Bitcoin Market Analysis
Currently, Bitcoin is hovering around $66,000, showing some declines. However, Bitcoin trading volume has increased by 48% to $23 billion, highlighting its strong presence in the market. Bitcoin's market cap is equally impressive, reaching $1.31 trillion.
These figures highlight the strength of Bitcoin as an investment asset, despite short-term fluctuations. For investors employing “covered strangle” strategies, the data is particularly encouraging: the continued growth in trading volume and high market cap indicate there is sufficient demand and liquidity to support complex options strategies.
Bold strategies to optimize profits
The “Covered Strangle” method proposed by 10X Research offers Bitcoin investors a unique opportunity to maximize profits while limiting risk. By combining the sale of call and put options, the strategy can collect additional premium and increase overall investment returns.
However, it is essential to stay aware of potential risks and adjust your strategy based on market trends. With careful analysis and strict risk management, the “covered strangle” technique can be a powerful tool in a cryptocurrency investor's arsenal.
Ultimately, Bitcoin continues to stand out as a dynamic and promising investment asset. For those brave enough to adopt a bold and well-informed strategy, the rewards could be huge. The “covered strangle” method could be the key to capturing new levels of profits in the fascinating world of cryptocurrencies. Meanwhile, China is eliminating the dollar.
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Fascinated by Bitcoin since 2017, Evaristo has not kept a record on the issue. If he is most interested in trading, this essay will help him to explore all the leading centers on cryptocurrencies. As an editor, I aspire to permanently produce high-quality work that reflects the state of the sector as a whole.
Disclaimer
The views, thoughts and opinions expressed in this article are those of the author and should not be taken as investment advice. Please conduct your own research before making any investment decisions.
