Why Should You Get More Straddles
Click, click, click… I’ve been seated here for so long my anxiety has worn off. And while I’m already 300 feet up, boredom starts to creep in.
It’s the rhythmic clicks and unwavering angle which puts me and the rest of the ride’s adrenaline seekers into an ignorant like calm.
It’s calm before a storm… And as we slowly inch over the apex like a snail the biggest drop I’ve ever seen. And when it happens, my fight or flight response kicks in sending chemicals to places that only PhDs know of.
I’m frozen, yet inundated with a symphony of emotions. There’s pleasure, adrenaline, and fear… dancing in chaotic harmony.
When the ride comes to a halt with my senses newly awake, I glance over at the line… I want more… Like a junkie fiending for his next hit.
And when I find myself back on the ride, the meditative clicks comatose me once more…
Which is where bitcoin traders find themselves now. And what most aren’t aware of the opportunity present to them. It’s at this time, the time as we inch across an apex, that we can strike.
The best part, to take advantage of the current conditions doesn’t require you to guess if the price is going up or down. You just need to act. Let me explain…
Since March 14th, over four months ago, volatility has only declined. Meaning the peaks and valleys of price have given way to a plateau just above $9,000.
And even with Twitter getting hacked for the benefit of a bitcoin scam, we’re still at $9,000. In fact, the sideways movement has gotten so bad and boring that the last time volatility was this low was in November 2018. Here’s a chart measuring volatility so you can see what I mean.
Now, back in November 2018 price fell off a cliff from $6,400 and got hammered. The thing was, the volatility today is exactly how it was just before price descended down its roller coaster. The speed of the drop made boredom a distance memory as traders were hitting their keys in a frenzy to buy and sell.
However, if you acted before the drop, you were loving every minute of it. So how do you act now in order to love the volatility once it comes?
Buy put and call options at strike prices near the current price. So if the price of bitcoin is $9,250 consider a call option at $9,500 or $10,000 and a put option at $9,000 or $8,500. Having both ensures you will be a winner if volatility ramps up soon.
And the best part is, you don’t need to wager much. Only a small fraction of your trading account.
Options give you the best of both worlds in that you don’t need to risk a lot in order to make a lot. And if you decide to give it a try, DO NOT be a fool and risk a lot. That’s not what options are for.
On a second cautionary note, if what I’m saying makes no sense and options seem like a foreign language to you, it’s probably best to try this trade on a test account and stick around for the pointers we are rolling out on options in the coming week. The crypto space is growing and options will be the area we anticipate the most growth to come in the coming year.
Next week we will show how volatility affects the pricing of options and why the straddle strategy works in the current environment we are in.
Until next time, we’re on the hunt…
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About Jarvis Labs: We are a team of passionate professionals with experience in data science, software engineering, economics and trading who came together to develop Jarvis, an artificial intelligence / machine learning software that tracks market movers. We’ve since gone on to become a one stop shop for crypto traders by building new tools, metrics, and platforms every day. Stop by Jarvis Labs to learn more and subscribe to our newsletter to learn what market mover is driving the market today.