Orbit Markets Offers Lookback Call Options for Bitcoin Traders

Investors anticipating a Bitcoin (BTC) price rally but expecting a pullback may consider using a lookback call option. This exotic option allows the holder to buy BTC at its lowest observed price during a specified lookback period.

Key points about lookback calls:

The strike price is set at the lowest price within a designated lookback period, which could be a month within a three-month option.
If BTC drops to $100,000 in the initial month before rising, the holder can buy at that lower price even if it increases to $140,000 later.
This structure helps maximize profit potential by avoiding the need for precise market timing, unlike traditional call options with fixed strike prices.
Orbit Markets recommended a three-month lookback call priced at 12.75% volatility, higher than the 0.25% for regular calls, reflecting the added risk of favorable entry.

While there's a chance BTC might not drop initially, and instead rises from around $115,000, the strike price would then be fixed at this level after the lookback period, allowing for potential profits as prices increase further.

The buyer's risk includes losing the initial premium if BTC falls below the established strike price, similar to standard call options.