Week 26, Trade 26 : LONG $BTC & $ETH OPTIONS
Sankalp Shangari
MD @ Rising Capital | Crypto & AI Investments | Writing on Macro & Crypto | Podcast: Greed is Good
?? Week 26, Lesson 26
"The market can remain irrational longer than you can remain solvent."– John Maynard Keynes
We are into Week 26 of the Fifty Two Trades in Fifty Two Weeks. Thank you for reading.
“The 52” deep dives into one trade every week, targeting traders with zero or little trading experience. But I hope that my pro trader friends find this as useful. For details on why I am doing this and who is this for, please read the About section on top, which I will update from time to time.
Most trades that we take will be medium (3-4 weeks) to long term in nature. We might do some swing trading here and there if opportunity presents, but always with proper risk management. After all, our purpose is to make money, not lose sleep over it.
You can track our trades and progress live here at this Link
Over 10 years in banking and now 12+ years dealing with nuances of crypto, I have learned some very hard lessons. I intend to share them transparently as we go. More importantly, please keep the comments and feedback coming, so I know we are on the right track together.
?? Portfolio Update - Open Trades
January was a strong month for $BTC and $SOL, with Bitcoin gaining 9.54% and Solana surging 22.3%, significantly outperforming Ethereum, which closed the month down -1.28%. Our focus on high-conviction assets like $HYPE and $BTC played out well, allowing us to capitalize on the bullish momentum.
The Solana ecosystem saw the most attention with the launch of $TRUMP and $MELANIA tokens, attracting significant trader interest and driving liquidity onto the chain. However, these launches also drained liquidity from the broader market, impacting narratives like AI & AI Agents the most. As a result, we were forced to close two of our positions at a loss.
This liquidity shift was the primary reason our performance lagged behind $BTC and $SOL this month. However, on a broader scale, our average monthly performance remains around 30%, outperforming BTC by more than 3x.
Now before we dive deep into the trade of the week, let’s take a closer look at our open positions:
Portfolio Update:
We continue to navigate the market cautiously, balancing between risk and reward. Stay tuned for more updates as we adjust our positions based on market conditions.We’ll continue to monitor the open positions closely and adjust as needed to navigate the range-bound market effectively. Stay connected on Telegram for real-time updates and insights.
If you have any questions, ideas, or feedback, please feel free to DM me on Substack or Twitter, Let's continue to navigate the market together!
THE POWER OF PATIENCE & DISCIPLINE
One of the most overlooked aspects of successful trading is patience. Many traders feel the urge to constantly be in the market, fearing they might miss out on opportunities. However, taking unnecessary trades often leads to poor decisions and increased risk. The best traders understand that waiting for high-probability setups is far more profitable than chasing every price movement. Warren Buffett famously said, "The stock market is a device for transferring money from the impatient to the patient." This applies not only to investing but also to trading—those who exercise patience and wait for optimal conditions tend to outperform impulsive traders.
Discipline goes hand in hand with patience. Sticking to a well-defined trading plan, following risk management rules, and avoiding emotional decisions help traders maintain consistency. It’s easy to get caught up in the excitement of the market, especially when prices are moving quickly, but reacting impulsively can lead to costly mistakes. Instead of forcing trades, focus on quality over quantity—only enter the market when conditions align with your strategy. Sometimes, the best trade is no trade at all.
A great way to build discipline is by using a trading journal to track your trades, emotions, and decision-making process. Reviewing past trades helps identify patterns in behavior, allowing traders to refine their approach and improve results over time. Another key practice is setting clear entry and exit rules before placing a trade, ensuring that decisions are made logically rather than emotionally.
Successful trading is not about always being active in the market but about making calculated, well-planned moves. Those who develop patience and discipline will find themselves on the path to consistent profitability, while those who lack these qualities often fall into cycles of overtrading and emotional decision-making. The best traders don’t chase the market—they let the market come to them.
?? Quick Macro & Crypto TL;DR
THE GOOD:
THE BAD:
THE WORSE:
For more regular insights into macro and crypto trends, subscribe to our weekly newsletter: 5-Minute Macro and Crypto Weekly.
?? Week 26, Trade 26 : $BTC & $ETH OPTIONS
Last week, global markets exhibited mixed performance, influenced by significant economic developments and escalating geopolitical tensions. The U.S. administration announced the imposition of a 10% tariff on Chinese imports and a potential 25% tariff on goods from Mexico and Canada. These measures have heightened fears of increased inflation, disrupted supply chains, and the potential onset of a trade war among these nations.
In response, China has retaliated with tariffs on U.S. goods and has revived antitrust investigations into major tech companies, including Google. This has added to the uncertainty in the technology sector, which was already experiencing volatility. Despite these challenges, positive earnings reports from major companies like Meta and Apple have provided some support to the market, contributing to a cautiously optimistic sentiment. However, the evolving geopolitical risks and central bank policies suggest that traders will need to remain agile in navigating the current environment.
We maintain a cautiously bullish outlook on the broader market and we are positioning ourselves to capitalize on potential upside. Below, you’ll find a detailed breakdown of the latest trades and how they align with our overall strategy:
TRADE 1: $ETH Call Options Expiring on 28th March
Current Spot ETH: $2,800 (as of 5th Feb)
Buy ETH Call Option at $3,000 – Premium Paid: -0.05 ETH = $105 on 3rd Feb
Rationale: Ethereum’s price had wicked to $2,200, offering a very good entry for our option. I'm positioning for a potential upside rally. With the ongoing developments in Ethereum and broader market trends, I believe Ethereum will recover and surpass the $3,000 level. If ETH surpasses $3,000, I'll be well-positioned to capture that upside.
Sell ETH Call Option at $4,000 – Premium Collected: +0.02 ETH = $58 on 4th Feb
To offset the cost of my long call, I’m selling a call at $4,000. This strike price still offers room for growth while limiting my risk. Given Ethereum’s potential upside, this trade structure reduces my overall cost and allows me to take advantage of the likely volatility leading into March. While this limits my upside potential above $4,000, the collected premium provides a cushion against any price fluctuations.
Risk and Reward:
Premium Paid: The cost of the trade is 0.05 ETH ($105). After selling the $4,000 call, the effective cost of the trade is reduced to $47 per option
Upside Potential: If ETH rallies between $3,000 and $4,000, I’m set to capture that upside. The call at $4,000 caps the gains, but the reduced cost means I still gain if ETH moves up.
Downside Risk: The primary risk comes if ETH drops significantly below the $2,800 level. In that case, the premium paid could result in a loss, but I see this as a good opportunity for a long-term position at lower levels. The premium collected from selling the $4,000 call adds some protection in this scenario.
TRADE 2: $BTC Call Option Expiring on 28th March
Current Spot BTC: $97,500 (as of 5th Feb)
Buy BTC Call Option at $92,000 – Premium Paid: 0.09 BTC (Limit Order)
Rationale: Bitcoin is currently priced at $96,978, and I’m looking for a pullback to $92,000 before executing this trade. I’ve placed a limit order for the call option with a premium of 0.08 BTC, so if the premium for the call drops to that level, I will buy. This gives me exposure to Bitcoin’s potential rally as I expect the price to move higher heading into March. The limit order allows me to enter the position only if the price aligns with my strategy and risk tolerance.
Risk and Reward:
Premium Paid: The cost of the trade is 0.09 BTC for buying the $92,000 call,
Upside Potential: If Bitcoin moves above $92,000, I’ll benefit from the long call once $BTC crosses $93,000
Downside Risk: If Bitcoin falls below $92,000, I risk losing the full premium paid on the long call.
?? CONCLUSION
In this week’s trade recap, we’ve positioned ourselves to capture upside potential while managing risk through strategic option plays. With global market volatility and geopolitical landscape, we remain cautiously bullish. The trades align with our outlook, offering favorable risk-to-reward ratios as we approach key market events.
Trade Highlights:
ETH Call Options, expiry - 28th March:
BTC Call Options, expiry - 28th March:
These trades reflect our commitment to a balanced strategy, leveraging options to reduce cost while positioning for market gains. The prudent approach ensures we're prepared for any price movement, with risk management through stop losses and premium collection.Stay tuned for more updates and insights! You can track all our trades here.
Now go grab a coffee and please DM for any questions. Keep in mind, this is NFA and DYOR.
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