Introduction
Previously, I shared that Bitcoin is one of 2 instruments that I believe will keep making new All Time Highs and it's just a matter of time.
I backed my belief with $$$ and trades. Here, I would like to share one of my current Bitcoin position in the US after Friday's close for future reference.
Bitcoin Instrument and Strategy
Previously, I shared that IBIT is one of my 2 biggest Bitcoin instruments.​
For IBIT, my main strategy is called the "Covered Strangle". This is a combination of owning the shares, and then, selling the Strangle around the Shares - you can think of this as a Covered Call with a CSP (Cash Secured Puts). I call this a Ratio Covered Strangle because I own 1900 shares, sold 19 Covered Calls (eventually) but only sold 13 Cash Secured Puts.
I deeply believe in both "strikes" and "expiry date" diversification, which you can see from below.
This is not a "sai lang" position, but represents a significant and a minority % of my total US portfolio.
My current Positions
My Entry Timing
I did not enter all these positions at the same time.
Initially I started small. Some time in December, after a period of continuous and deep study, I decided to own 1,800 shares (roughly representing my YTD profits in both Bursa and US) before end of December, because I wanted to park my profits into Bitcoin.
Turns out the entry timing was TERRIBLE from a trader perspective! Not surprising, as I chased and was impatient (FOMO) to wait for better entries - the bulk of my entry occured AFTER Bitcoin made new all time highs above $108k in mid December and started falling.
At the time, I did not have any Covered Calls, because there were so many upcoming catalysts where I didn't want to cap the upside. It is only after Trump inauguration mid this week, and after he did NOT announce a Bitcoin Strategic Reserve, that I started to lay in the Covered Calls. Polymarket bet that US sets up a Bitcoin Strategic Reserve in the first 100 days has crashed, indicating that it will take longer - some speculates it might take up to 6 months, but whether it is Bitcoin, Bitcoin+Crypto, Crypto without Bitcoin is still up for speculations.
IBIT Price Chart
Price chart is interesting - calling out the following:
Summary of Results
My prognosis about the future
I don't know the future. However, my base case now is that Bitcoin is going to remain in a consolidation zone for a few months (?), when this is the time to start selling Covered Calls and CSP around my shares. If Bitcoin stays sideways for majority of this year, then, the sum of my Options selling will give higher returns than the price gains from the shares. However, my future actual returns is not dependent on what I think will happen above.
Summary and Conclusion
It's clear from above, that my entry timing into the shares are terrible and definitely below average for a trader.
However, the saving grace is 2 fold:
In short, as an Options seller/trader, you don't need to have to best entry timing to make monies.
However, it is important to have a lot of the other skills as they matter more for the Options.
Additionally, we must not be dogmatic about selling all the time - majority of the time, it really makes sense to sell, however, there will be certain times and zones when we should consider shares and certain times, zones, setups when we should consider buying the Option instead of selling.
Btw, the $8,600 paper gains in the attention grabbing title really doesn't matter, and is not day-to-day focus at all. I only tally this up because I just wanted to write this article to share. On normal days, I just ignore that because to win in the end does not require us to know what the paper gains are per se, but requires us to focus on areas that matters.
In more detail, the real focus is every week, every 2 weeks, the sell options expires worthless and we win - then the account will keep making new all time highs regardless of the stock price. The stock price itself - its short term performance - doesn't matter in the long run when it makes new all time highs. It can crash 50% from here and then recover 100% to go back to original price and our account will still make new all time highs due to our options. As long as we remain a strong hand, don't capitulate, trade small, always use Cash Secure where the broker cannot force us to close our positions, given our understanding of Options+Charts+Trading, we can only win and that is almost a certainty, barring catastrophic end of the world event like Bitcoin going to zero.
If you don't understand, don't follow, else, you would be gambling.
For future reference.
Disclaimer: Not financial advise. Just a random guy on the Internet ;-). As always, you are fully responsible for your own trading and investing decisions.
Created by DividendGuy67 | Feb 11, 2025
Created by DividendGuy67 | Feb 08, 2025