Was not sure if it will pump or dump, still made 100% profit
There are setups on a chart when you aren’t really sure if it will pump or dump but sure about a big move in next few hours. A good example can be a confluence of bbands squeeze, weekly candle close, uncertainty in legacy markets, news like feds interest rate cut announcement etc.
And the above happened last night so I decided to make some money out of it while everything is burning and dumping or there is fear & uncertainty around.
This can also work in normal situations when you see a setup on a chart that shows a big move incoming but you don’t have the confirmation of certain things yet to go long or short. A good example can be when traders who follow TA mark certain levels which when broken price can move aggressively in that direction or do a fakeout and move in other direction. So if you describe such things to noobs in some telegram groups they might not understand and make fun of TA. But this data can help you make money using MOVE options because you are sure about volatility or sideways in some cases.
The news which I was talking about above:
Now Let me share my experience of using MOVE Options on Delta Exchange.
There is a strike price which is the 30 minutes TWAP(Time Weighted Average Price) of BTC price at 5:30 PM IST ( 12 PM UTC), your bet is to predict how far the price will move from the strike price in next 24 hours.
Link for the contract trading while writing this post: https://www.delta.exchange/app/move_options/trade/BTC/MV-BTC-D-170320
I was expecting more volatility later and price had done a fakeout followed by a dump. And it worked, I made a 100% profit by evening today when price dumped below 5k.
One thing which is different here and people new to options might not be aware of it is that there is no liquidation price or leverage used to buy MOVE Options on Delta for BTC and ETH.
To read more about it please refer to: https://www.delta.exchange/user-guide/docs/tutorials/move-contracts/
One last important thing to keep in mind while trading MOVE Options on Delta is the spread, you might see a lot of difference in buy order, sell order and mark price however you can solve this issue by two ways:
- Use limit orders. Never market buy or market sell. Once the position is open and you don’t plan to keep it open until expiry i.e. 5:30 PM IST, you should place limit orders to close it in profits and not react after the market moves.
- Don’t close position and wait for expiry which will close it based on mark price and not the orderbook. I did the same.
If you think the market will move sideways for a particular day, can sell/short MOVE Options with upto 10x leverage. Please note this will have a liquidation price.
Austerity Sucks writes about derivatives on Medium and is trading in crypto from few years now. I asked him few things about using MOVE Options for trading volatility and below was his response:
FTX also has MOVE Options contracts and people can even use them in combination sometimes because expiry time, orderbook, margin etc. differs. Also Delta has BTC and ETH Move Options whereas FTX got Move Contracts for only BTC.
I would request the experienced traders to try MOVE Options on delta once for BTC and ETH. Please use my referral link if you have not already registered an account on Delta: https://www.delta.exchange/referral?code=BLGNHE