Today we start with the obvious: Bitcoin SV has been crushed, ~20% over the last 24 hours, and close to 40% off the highs made by the April 1st rally. This sell-off comes off of the news that Binance (and other exchanges to follow) will delist the crypto due to its disgust of Bitcoin SV’s founder Craig Wright prancing around claiming to be the original Satoshi Nakamoto.
Special situations or events like this should cause a trader to be on the lookout for trading opportunities off of this move. Either traders will be rolling out of their BSV holdings and allocating into a different crypto, or this BSV selloff could be the start of a bearish move within the entire crypto space. If one thinks this BSV selloff is overdone, then one can look at options play such as these:
BSV M (6.28.19) 40 Puts 3.75/7.00
BSV M (6.28.19) 55 Puts 10.25/14.75
BSV Ref $55.40
As a spec trade, one can sell puts to get long. In this scenario, one can take advantage of the ‘panic selling’ and fear of lower prices seen in the elevated implied vol and put skew in the BSV options curve.
The $40 puts in BSV are worth ~10% vols higher than the ATM’s. As we mentioned in our previous BTC Options Skew Changes piece, ”The put skew is suppressed and is trading at levels not consistent with historical performance.” In the case for the BSV options curve, the put skew caught a bid relative to the BTC options curve. Also, the mid-market implied vol of the BSV $55 puts (ATM) is ~105%, compared to 60–65% implied vol of BTC options. If you are comfortable selling puts with the mindset of getting LONG BSV, then this strategy would be an effective and cost effective way of doing so rather than just buying the spot and trying to catch the falling knife.