How does a long calendar spread with puts strategy work in the context of cryptocurrency trading?

1 answers

• Jan 01, 2022 · 3 years ago
  A long calendar spread with puts strategy is a popular approach in cryptocurrency trading. It involves buying a longer-term put option and simultaneously selling a shorter-term put option with the same strike price. This strategy is based on the expectation that the price of the underlying cryptocurrency will remain relatively stable in the short term, but may decrease in the long term. By selling the shorter-term put option, you can generate income to offset the cost of the longer-term put option. The goal is to profit from the time decay of the shorter-term option while still having the longer-term option as protection against a significant price decrease. It's important to carefully analyze market conditions, select appropriate strike prices and expiration dates, and actively manage the position to maximize potential gains and minimize risks. Remember, each cryptocurrency exchange may have different options available, so it's important to consider the specific offerings of the exchange you're using.
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