From 10k to 500k against the odds! Relying on these few hedging strategies

1. Core Differences Between Bitcoin and Stocks (Must Know)

Volatility: Bitcoin average daily 3%-8% (stocks 1%-3%), extreme times exceed 10%

Trading: Continuous 24 hours (no market closure, night volatility concentrated)

Fear Index: Use GVZ instead of VIX

Options Underlying: Mostly Bitcoin futures options (not spot), liquidity concentrated in top exchanges

2. Core Components of the Strategy (3 Tools)

Sell Bitcoin out-of-the-money call options (earn premium)

Strike Price: Current price 110%-115%

Scenario: GVZ percentile > 80% (historical high) + before major events (halving / regulatory hearings)

Example: Bitcoin at 40,000 USDT, sell call with 44,000 strike price, collect 800 USDT premium

Buy GVZ call options (hedge against black swan)

Ratio: Use 25%-35% of the premium from selling calls to buy

Strike Price: GVZ current price out-of-the-money 10%-15%, expiration date consistent with call options

Example: From 800 USDT premium, use 240 USDT to buy GVZ calls to hedge against crash risk

Sell Bitcoin out-of-the-money put options (supplement premium)

Strike Price: Current price 85%-90% (stocks 80%, to avoid frequent exercises)

Scenario: GVZ percentile < 70% (moderate volatility) + no major bearish news

3. Life-and-Death Discipline (Stricter than Stocks)

Opening Position: Only operate before major Bitcoin events (halving / Federal Reserve meetings / SEC announcements), require GVZ > 90% percentile

Position Size: Single trade ≤ 3% of principal (stocks 5%, due to high Bitcoin margin volatility)

Closing Position: Must close 4-6 hours before expiration (avoid extreme night volatility)

Hedge Adjustment: If Bitcoin rises over 10%/falls over 8% in a single day, or GVZ rises 30% in 1 hour, immediately supplement GVZ position

4. Cases and Risks (Streamlined)

Profit Example: Before SEC sued Binance in 2023, GVZ at 88%, sold call at 41,800 (collected 950 USDT) + bought GVZ calls (285 USDT) + sold put at 34,200 (collected 700 USDT), total profit at expiration 2,070 USDT

Loss Example: In 2021 Bitcoin short, naked sold call at 69,000 (no hedge), Bitcoin rose to 69,000 within 3 days, loss of 89%

5. Hardcore Risks (Beginners Beware)

Selling Calls Huge Loss: Bitcoin often rises over 20% in a single day, losses occur 5-10 times faster than stocks, GVZ hedge may fail

Forced Liquidation Risk: When GVZ skyrockets, margin may double, if not supplemented within 24 hours it will be forcibly liquidated $BTC $ETH #加密市场回调 #美联储7月会议纪要