Bitcoin Secret: Experts Say This Strategy Wins Now!

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<a href="https://bbg-news.com/btc-usd/">Bitcoin</a> ‘Short Strangle’ Preferred as Market Signals Near-Term Calm: 10x Research

What to know:

  • 10x Research prefers the short strangle strategy for the second month as market dynamics point to near-term calm.
  • The strategy involves selling out-of-the-money options to capture premiums, assuming bitcoin remains between $95,000 and $125,000.

In this article

BTCBTC$111,846.73◢1.95%

As an analyst, I find it surprising that Bitcoin managed to maintain relatively stable trading within a certain range during August, contrary to popular expectations of high volatility. Given the current market dynamics suggesting a prolonged low-volatility phase in the near future, I recommend the “short strangle” strategy as a suitable option for traders. This strategy involves selling both call and put options with the same strike price but different expiration dates, profiting from the decreased volatility while taking on limited risk.

According to Markus Thielen, the founder of 10x Research, due to the present trends in the Bitcoin options market, a short strangle strategy seems fitting for the upcoming month. With Bitcoin trading at approximately $113,000 and an estimated price range between $95,000 and $125,000, selling an out-of-the-money put option for September expiration close to $95,000, alongside an out-of-the-money call option for September expiration near $125,000, presents a chance to collect premium.

A short strangle strategy involves selling, or writing, options for a higher price (out-of-the-money call options) and a lower price (out-of-the-money put options), both with the same expiration date, and placing them at an equal distance from the current price of the underlying asset.

In simpler terms, this strategy works like buying insurance that covers both market rises (bullish) and falls (bearish). This insurance comes with a fee, which is the maximum amount of profit you could potentially earn if the price of the asset stays within the given range – in this instance, between $95,000 and $125,000.

Utilizing option selling strategies like “buying strangles” becomes popular when the anticipated volatility (IV) is higher than the actual volatility in the market. This approach offers traders a chance to earn more lucrative premiums since they’re betting that the market will stay fairly tranquil, thus reducing price swings.

According to Thielen’s observation, the strategy proves effective because the implied volatility curve is trading above actual occurrences, suggesting that options are overvalued. This indicates a low probability of significant market fluctuations outside your specified range in the immediate future as the implied volatility term structure suggests a period of relative calm ahead.

As a researcher examining financial derivatives, I’d like to highlight an essential concept: the implied volatility (IV) term structure. This graphical representation illustrates how volatility is anticipated to change across various future periods. Normally, it exhibits an upward slope, indicating that uncertainty and risk tend to increase as the time until expiration grows longer.

Risk-reward profile

For the proposed strategy to yield profits, Bitcoin (BTC) should maintain its trading within the range of $95,000 to $125,000. This price stability, or rangebound trading, will decrease the need for Out-of-the-Money (OTM) calls and puts, leading to a decline in their premium. As a result, the sellers of strangle options can benefit from this premium drainage.

In simpler terms from mid-August, Thielen suggested a similar investment strategy known as a “short strangle.” This involved purchasing a put option for $105,000 and a call option for $130,000. The execution of this strategy resulted in an earnings return of approximately 3.5%.

As a crypto investor, I’d like to emphasize that diving into short strangles isn’t without its perils. A sudden surge in volatility could potentially cause hefty losses, making it crucial for us to stay vigilant and keep a close eye on our position and market indicators. Proactive risk management is key here.

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2025-08-29 10:18