Historical data shows that it is almost impossible to consistently predict Bitcoin price trends, and many traders who try to do so end up losing money. With Bitcoin now trading around $50,000, the ultimate goal for most traders is to keep their current holdings and grow them gradually in a way that is not too risky.

Option strategies provide excellent opportunities for traders who have a fixed target range for an asset. For example, the use of leveraged futures contracts may be a solution to a scenario where prices are expected to rise 28% in the next month. The use of a stop loss obviously reduces the viability of the business.

On the other hand, using multiple calls can create a strategy that allows you to make a profit four times greater than the potential loss. They can be used in both rising and falling markets, depending on the investor’s expectations.

The long butterfly strategy allows a trader to take advantage of an uptrend while limiting losses. It is important to remember that options have a fixed expiration date, so a price increase must occur within a certain period.

The Bitcoin Calendar (CTB) options below are for March 26, but this strategy can also be used with the Ether (ETH) options or any other calendar. While costs vary, their overall effectiveness should not be compromised.

Gain/Loss Measurement. Source : Derribit positioner

The proposed bullish strategy is to buy 1 BTC worth $48,000 of call options and simultaneously sell twice as many call options worth $56,000. To complete the transaction, you need to buy 1 CTB worth 64,000 calls.

While this call option gives the buyer the right to buy the asset, the seller gets a (potential) negative risk from the contract.

As shown in the estimate above, a BTC price of $48,700 translates into a net gain of between $49,380 (up 1.5%) and $62,630 (up 28.6%). For example, a 10 percent price increase to $53,570 yields a net gain of $4,000. In the meantime, this strategy has a maximum loss of $1,350 if the BTC is sold on the 26th. March transactions are less than $48,000 or more than $64,000.

The appeal of the Butterfly strategy is that a trader can make a profit of $4,050, which is three times the maximum loss if the BTC is traded with a maturity of $53,550 to $58,460.

In general, trading leveraged futures contracts gives much better risk results due to the limited downside potential.

Trading a multiple option strategy offers the best return on risk for bullish traders seeking access to BTC price appreciation. The only prepayment required is $1,350, which is the maximum loss if the stock price is less than $48,000 or more than $64,000 at the expiration date.

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and every stage of trading involves risk. You should do your own research when you make your decision.

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