Bullish ETH Options Trade Targeted $3K Price With No Liquidation Risk

A bullish ETH options trade targeted a $3K price tag with zero liquidation risks as the crypto markets start to turn around and raise opportunities for the risk-averse traders to use the Long Condor options strategy and long the second biggest cryptocurrency so let’s read more in today’s latest Ethereum news.

Ether’s price spent the past two months stuck and even the bullish eTH options trade targeting a new price tag with most bullish traders will admit that there was a chance of trading above $4400 in the next few months but became dim. Of course, crypto traders are often optimistic and it is not unusual for them to expect another all-time high but this seems like really an unrealistic outcome. Despite the current bearish trend, there are a few reasons to be bullish about the next few months using a long condor with call options strategy that can yield a very good outcome.

Options markets provide more flexibility to develop custom strategies and there are two instruments available as well. The call option gives buyers an upside price protection and the protective put option does exactly the opposite. The trader can also sell the derivatives and create unlimited negative exposure much similar to the futures contract. The long condor strategy was set in March 25 expiry and uses a bullish range. The same structure can be applied for a bearish expectation but the scenario assumes that most other traders are looking for an upside as well.

Ether was trading at $2677 when the pricing occurred but a similar result can be achieved starting from any price level. The first trader requires purchasing 5.14 ETH worth of $3000 call options and creating a positive exposure from the price level. Then, in order to limit gains above $3500, the trader will need to sell 4.4 ETH contracts of the $3500 call. To complete this strategy, the trader has to sell 6.65 ETH contracts and limit the gains above the $4000 level. A $4500 upside protection call is also needed to limit the losses if ETH skyrockets.

The strategy could sound quite complicated to perform but the margin required is only 0.175 ETH which is the max loss as well. The potential net profit happens if ETH trades between $3100 and $4370. the traders should remember that it is also possible to close this position before the expiry date and in this strategy, the maximum gain will happen between $3500 and $4000 which is three times higher than the potential losses. Unlike futures trading, the strategy gives the holders peace of mind because there are no liquidation risks and it is also worth noting that most derivatives exchanges accept orders as low as 0.10 ETH which means a trader could build the same strategy using a smaller amount.