Morning Report 1/10/19: I Told You So

A week ago (1/3/19), I wrote a piece on RISK MANAGEMENT recommending purchasing a March Fence (aka a collar) for firms that are long ETH in their inventory. The trade was to buy the H $100 puts and sell the H $250 calls against it. When we sent out this report last week, the market for the fence was -8/8 (worth flat premium). Today, the market 0/16 (worth $8 — put premium). The value of this fence went from flat to $8. You potentially could have hedged ~$8 (less fees) to offset the ~$20 of losses incurred today by this ETH selloff.

The following day (1/4), my morning report was in regards to the Constantinople event. I explained that there could be uncertainty with this forking catalyst, and markets could see “tumultuous price action”. Let’s review the options that were put in front of you last week and include todays comments and results in red:

  • Without taking a directional view, buying Straddles is the most efficient way to get long GAMMA and could give you the opportunity to scalp potentially choppy market conditions. Potential Exit Strategies are to:

This may be a lot to digest, so if you have any follow-up questions or want to talk through any of these trades step-by-step, please give us a call and we can continue to help educate you in how to PRESERVE CAPITAL, or make SPECULATIVE GAINS.

Contacts

Tim Kelly
Founder and CEO

tkelly@bitooda.io

Brian Donovan
Executive VP of Institutional Sales
bdonovan@bitooda.io

Dr. Ilya Kurland
Chief Derivatives Strategist
ilya@bitooda.io

About BitOoda

BitOoda is a digital asset advisory firm specializing in trade execution, market analysis, and structured products.

For business inquiries, please e-mail info@bitooda.io

A global digital asset financial technology & services platform providing next-gen risk management solutions, best-execution brokerage & expert market analysis.

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