This post is a selection of insights from our reports to subscribers this week, showcasing how we build the contextual framework to find daily trade ideas. This is a repeatable process aimed at finding high-risk-reward trades. Note that the onus is on the subscriber to pick and choose which trades fit their overall risk.
In this week’s blog post, as part of the insights and trade ideas shared with subscribers, we focus mostly on the option structures around BTC and ETH as that’s where money is flowing. Not only we entered new trades to potentially take advantage on a crypto retracement but we successfully closed some structures that made us a decent chunk of money such as calls sold in MARA or unwinding ETH/BTC call switches.
For a deeper dive into how I structure my trade ideas and to learn my thorough process, watch our Free Options Trading Webinar.
Put Ratio in Bitcoin
We looked to cheaply play a pullback into end of March in BTC, and also take advantage of the potential for vol to come lower if spot retraces from the parabolic rally. We were also happy to envision the possibility to pick up some delta down at $55k, because we have hedged our BTC exposure.
Calls Sold in MARA Do Their Job
If you recall from last week, we were interested to earn some income and sell MARA vol before their earnings. Well, since earnings last week, MARA stock is down around 30%, while BTC is still near the highs. The short calls that we had against against our long term stock holding have evaporated, so we bought them back and sold the same calls in April 19 2024. This position is still covered and helps reduce our delta against our short Mar15 24 25/20 put spread which has gone in the money.
Unwinding Call Switch Balance in ETH/BTC
We also decided to unwind the June call switch balance, but because the ETH calls have done so well as the vol spread has moved up to 6 vols from flat, and the ETH/BTC spread has also bounced, we were able to keep some of the ETH calls as a free ride. We still think ETH has plenty of upside into June, but don’t need to be exposed to short BTC risk.
Iron Condor in Copper Stock
Copper had been struggling to move as of late as it faces a wall of resistance just under $4.00. This caught our attention to trade FCX (Freeport-McMoRan). The stock has a very positive carry similar to the underlying commodity copper, and on top of that, it has liquid tradable options. Since we were looking for more carry trades in the portfolio, this one clearly stacked up well.
Remember, not only do I share these trade ideas, but the ones I end up adding to my portfolio, are then tracked via a 20-30m weekly webcast as part of our Macro Options Overlay. You get to learn how to break down options trades by Greeks and restructure trades in an optimal way.
We also offer training courses that teach you the concepts and mechanics that affect how options contracts perform. You will learn what makes a great trade, and what is just a gamble. The result? Higher quality ideas, more consistent returns. Find out more in our Educational courses.
Remember, you now have a chance to build your knowledge base via our FREE Options Insight webinar! You will learn the process and tools I follow, from thesis to trade idea and actual execution.
Just click the link below!
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Thank you for making it this far!
As always, if you have any questions, comments, and/or found this helpful, feel free to reach out and let us know at info@options-insight.com
Cheers!
Imran Lakha
Options Insight
