Summary

10x Research recommends favoring the short strangle strategy for the second month in response to current market dynamics that indicate stability in the short term.

Key Points

• The strategy focuses on selling out-of-the-money options aiming to capture premiums if bitcoin stays between $95,000 and $125,000.

Image

Bitcoin has exhibited a trading range, contrary to projections of high volatility for August. As per the report from 10x Research, the short strangle strategy is deemed suitable due to ongoing low volatility trends.

Quote: “Given the current dynamics in the bitcoin options market, a short strangle looks well-suited for the next month. With bitcoin trading around $113,000 and an expected range between $95,000 and $125,000, selling an out-of-the-money [September expiry] put near $95,000 alongside an out-of-the-money [September expiry] call near $125,000 provides an opportunity to capture premium,” said Markus Thielen, founder of 10x Research.

The short strangle strategy involves selling both higher strike calls and lower strike puts, expecting the underlying price to remain stable while the trader collects the premiums as profit. However, traders must be mindful of the risks, especially concerning unexpected spikes in volatility that could result in substantial losses.