October Bitcoin Surge Prompts Analysts to Suggest Bullish Call Spreads

Bitcoin (BTC) Surge and Investment Strategies

Bitcoin has surged past $126,000, creating a bullish sentiment in October.
Traders who missed the initial rally are considering various option strategies to participate in potential future gains.

Call Spreads

Markus Thielen suggests buying out-of-the-money (OTM) calls or call spreads, such as $130,000/$145,000, to capitalize on potential upside without high costs.
A bull call spread involves buying a lower strike call and selling a higher strike call with the same expiration, limiting profit but reducing entry cost.
This strategy limits maximum loss to the net premium paid if BTC unexpectedly falls.
Trades are often executed through block trades, with both long-dated and short-dated options being popular.

Greg Magadini suggests financing bull call spreads by writing lower strike OTM puts, minimizing initial cost.
Selling puts obligates the seller to buy BTC if its price drops below the put's strike, introducing significant downside risk.
BTC calls are generally cheaper than puts, especially for longer durations.

For long-term exposure, simply holding BTC has proven rewarding, with prices rising from $1 in 2011 to over $120,000.