The crypto market is starting to turn around, raising opportunities for risk-averse traders to use the Long Condor options strategy to long ETH.
Ether price (ETH) spent the last two months stuck in a rut and even the most bullish trader will admit that the possibility of trading above $4,400 in the next couple of months is dim.
Of course, cryptocurrency traders are notoriously optimistic and it is not unusual for them to expect another $4,870 all-time high, but this seems like an unrealistic outcome.
Despite the current bearish trend, there are still reasons to be moderately bullish for the next couple of months, and using a “long condor with call options” strategy might yield a positive outcome.
The strategy might sound complicated to execute, but the margin required is only 0.175 ETH, which is also the max loss.
The potential net profit happens if Ether trades between $3,100 (up 15%) and $4,370 (up 63%).
Traders should remember that it is also possible to close the position ahead of the March 25 expiry.
In this strategy, the maximum gain occurs between $3,500 and $4,000 at 0.56 Ether, which is more than three times higher than the potential loss.
Unlike futures trading, this strategy gives the holder peace of mind because there is no liquidation risk. It is also worth noting that most derivatives exchanges accept orders as low as 0.10 ETH contracts, meaning a trader could build the same strategy using a smaller amount.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.
Every investment and trading move involves risk. You should conduct your own research when making a decision.
