期权策略

#期权策略 #备兑开仓 #期权对冲 #BTC

The Rat’s Nest of Weird Options: Constructing a Conservative Trading Strategy (1) Opening a Covered Position

1. What is a covered position opening?

Covered opening is a strategy in options trading that involves simultaneously holding an asset (such as a stock) and selling (or writing) a call option on that asset. This strategy is mainly used when the market outlook is judged to be slightly rising or volatile.

Example:
Suppose you hold a stock, say the price per share is 50 yuan. You don't expect the stock's price to rise significantly in the short term. At this time, you can perform a covered opening operation, that is, while holding the stock, sell (write) a call option with an exercise price of 55 yuan. By selling the option, you receive an immediate premium (the fee paid to you by the buyer).

The result of opening a covered position

If the stock price rises: but does not exceed $55 (the exercise price of the option), then the call option will not be exercised. Not only do you keep the stock, you also earn the option premium.
If the stock price rises significantly: above $55, then the buyer may exercise the call option. This means you need to sell the stock at $55 (even though the market price is higher). While you may have lost some potential stock appreciation, you still earned the option premium and proceeds from selling the stock.
If the stock price drops or stays the same: the call option will not be exercised, you still keep the stock, and receive the option premium.

2. When to use covered position opening strategy
When the stock price rises slightly or moves sideways
Choose an appropriate strike price: Choose a strike price that is slightly higher than the current stock price so that if the stock price rises slightly, the option will not be exercised and the option premium will be collected.
Option expiration time: Choose short- to medium-term expiration times so that you can reassess market conditions more frequently and adjust your strategy.
When market volatility is high
Leverage Volatility: In markets with high volatility, option premiums will typically be higher. In this case, you can earn more by selling the call option.
Pay close attention to market dynamics: High volatility may mean rapid changes in stock prices, and you need to pay close attention to market conditions in order to adjust your strategy in a timely manner.
When expecting extra income
Periodic strategy: Selling call options on a regular basis (such as monthly or quarterly) to earn a steady premium as additional income.
Choose a safe exercise price: Choose a relatively safe exercise price that is higher than the current stock price to reduce the possibility of the option being exercised.
When stock prices are high
Set a reasonable exercise price: When the stock price is high, you can choose an exercise price that is close to or slightly lower than the current stock price, so that you can sell the stock at a relatively high price when the stock price falls.
When preparing to exercise an option
Be prepared that the stock may need to be sold at the option price, especially if you believe the stock price has reached its highs.

3. Risk warning
Limits upside potential: If the stock price rises significantly above the strike price, investors will need to sell the stock at a strike price below the market price.
Stock downside risk: If the stock price falls, although the option premium can provide a certain buffer, it still cannot fully offset the loss of the stock price decline.
​
4. How to construct your covered position opening strategy

Eigen has airdropped, and it is estimated that it will be listed in the near future. Can it be shorted?

Let me first say the conclusion. It is overvalued by $10, so it can be shorted.

The total amount of coins is more than 1.6 billion, and there will be unlimited additional issuance in the future. For a re-staking project governance coin, how much it is overestimated, you have your own scale in your heart.

Compared with the staking project lido, the coin amount of the same scale is only valued at about $2.

It should be a consensus that eigen will return to less than $1 in the future.

New coins will have a premium period. In the new coin stage, you may as well use hedging strategies to get the wool first. Buy spot + short contracts.

Wait until the spot price reaches the top, sell the spot, and hold the contract alone to wait for the value to return.

There will inevitably be a project that explodes in the re-staking track this year. This gray rhino is already a behemoth in the concubine system. Who will explode, wait and see.

Use hedging to shield risks together and get rich slowly. $ETH #对冲交易 #冰火岛 #期权策略

#内容挖矿 #热门话题 #BTC #期权策略 #OptionsTrading
A strange rat’s nest of options: Constructing a trading strategy for volatile market conditions (1) Straightforward strategy

1. Principle of strategy
A strangle strategy involves the simultaneous purchase or sale of call and put options with different strike prices. Unlike the straddle strategy, the call and put options of the straddle strategy usually have different strike prices, where the strike price of the put option is lower than the current market price and the strike price of the call option is higher than the current market price.
2. Construction method:
Long Strangle: Buying a put option with a lower strike price and a call option with a higher strike price simultaneously. Short Strangle: Selling a put option with a lower strike price and a call option with a higher strike price simultaneously.
Risks and benefits
Buy Le style:
Return: Theoretically unlimited, when the price of the underlying asset rises or falls significantly, the return increases.
Risk: Limited and fixed, maximum loss is the total option premium paid.
Advantages: Compared with the straddle strategy, the initial cost is lower because the execution price is further away from the current market price.
Disadvantages: Requires larger price movements to achieve profitability
Selling style:
Benefit: Limited and fixed, the maximum profit is the total option premium received.
Risk: Theoretically unlimited. Losses increase when the price of the underlying asset fluctuates significantly.
Advantages: Stable income, suitable for less volatile market environments.
Disadvantages: Exposed to greater risks, especially when the market fluctuates significantly.
3. Select an option contract
Execution price:
For a buy strangle, when choosing a strike price you will usually choose an option that is far away from the current market price. For selling strangles, choose options that are relatively close to the market price but still some distance away.
4. Greek letter risk management Delta (Δ):
Since the execution prices are different, the delta values ​​will not be completely offset, so attention should be paid to the direction risk. Gamma (Γ): Gamma is lower because the option strike price is further away from the current market price. Theta (Θ): Theta has a greater negative impact when buying a strangle, and the opposite is true when selling a strangle. Vega (ν): A buying strangle is sensitive to rising volatility, while a selling strangle is sensitive to a falling volatility.
5. Actual operation process

🔊Does the low volatility of Bitcoin spot ETFs bring more stable investment returns to option selling strategies? 🚀

According to the latest chart strategy forecast released by Matrixport, Bitcoin's volatility may continue to decrease, which means that Bitcoin's price may not fluctuate much in the future. This is good news for option sellers, because they can earn additional premiums by selling options and increase Bitcoin's investment returns.

Imagine that Bitcoin's volatility has decreased, then option selling strategies may become a new favorite for investors. Despite the two short-term losses in the third quarter of 2023 and the end of the first quarter of 2024, this selling strategy may bring more stable returns in the long run.

Moreover, with the launch of Bitcoin spot ETFs, this huge volatility trend is expected to decrease more significantly. At the same time, a low-volatility environment is simply a boon for option sellers and is expected to become an effective profit strategy in the coming months.

However, it is a reminder that in the world of cryptocurrency, every small change may have a huge impact. So, although the forecast data points us in the right direction, we still need to be more careful when investing, and don't just rely on data analysis and forecasts to make investment decisions.

💬 Finally, what do you think? Do you agree with the view that Bitcoin's volatility will decrease? If you agree, would you consider adopting an option selling strategy? What do you think of Matrixport's forecast? Leave your opinion in the comment section!

#比特币 #期权策略 #投资洞察 #加密货币动态