Weekly Summary: Electoral Impact and Winning Strategies
Donald Trump’s victory in the presidential election shook the markets, pushing Bitcoin to highs of $76,000. This surge demonstrated the classic market strategy: “Buy the rumor, sell the news”. Following the confirmation of the news, volatility dropped significantly, marking the end of a period of high speculation.
Closed Strategy: A Strategic Profit
This week, we closed our strategy involving the purchase of a December 2024 BTC Call at $2,677 and the sale of a $60K Put at $2,625. With current prices at $4,475 for the Call and $618 for the Put, the operation yielded a total profit of $3,805 USD, equating to a 25.37% return on our initial margin of $15,000 USD. We successfully capitalized on the pre-election uncertainty and the subsequent spike in options premiums.
Analysis of the Current BTC Chart
Bitcoin’s chart shows a strong rally following the election outcome, with indicators suggesting potential consolidation ahead. The drop in volatility after the event indicates that the prior speculation had already been priced in. This leaves the market at a watchful stage, with potential corrections before a further rally that could push BTC toward $100,000, although likely not in one swift move.
Future Strategy and Position: Constant Vigilance
With volatility now tapering off and no clear signals from the options skew, our strategy shifts to a more defensive stance. We will continue monitoring the market for new volatility adjustments that could present future opportunities.
Educational Note: Volatility as the Key to Options Success
LVolatility is more than just a risk indicator; it’s a predictive tool that helps anticipate market behavior. During periods of uncertainty, options premiums inflate, creating lucrative opportunities. Once the event concludes, volatility decreases, and those opportunities diminish. This week showcased this phenomenon clearly post-election. Now, we prepare for the next opportunity when volatility spikes again.
Data Moontower
Conclusion
This week we closed with substantial gains thanks to a well-executed strategy. The focus now shifts to patiently observing the market and being ready to act when new volatility signals arise. Patience and preparation will be our strongest allies in this environment.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Every investment involves risk.
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