When you think about Bitcoin (BTC), chances are you’ll be split between two ideas…
First, you might wish you’d bought a big chunk of it a lot earlier. It recently traded around $105,000.
And second, you might be afraid to get in now given the whipsaws Bitcoin has seen. During “crypto winters,” Bitcoin has fallen over 80%. And the last thing you want to do now is buy in at the highs.
That’s why I trade BTC differently. I call it “Bitcoin skimming.” And with my skimming strategy, you don’t have to worry about picking the right time to buy in. You also don’t have to stress over if – or when – Bitcoin will crash again.
In fact, you don’t have to deal with the hassle of actually owning Bitcoin at all.
And that’s what I’d like to share with you today…
My subscribers profited twice this month trading BTC – without using a digital wallet or crypto exchange.
Let me show you how…
A Better Way to Profit
I’ve never been a fan of crypto wallets, passphrases, or exchanges. That’s why I wanted to give my followers a better way to trade Bitcoin… right in their normal brokerage account.
I trade Bitcoin not by trading or owning it directly. Instead, I use an exchange-traded fund (ETF) that gives me exposure to the BTC price.
And that’s gotten even easier in recent months. Just last year, the Securities and Exchange Commission (SEC) approved several new Bitcoin spot ETFs. That’s given us even more ways to put my strategy to work…
For example, the iShares Bitcoin Trust ETF (IBIT) tracks the price of BTC. That gives us a simple way to profit from Bitcoin’s moves… without having to worry about exchange hacks and the like.
Yet that’s not all…
I like to add another layer of protection to my Bitcoin skimming strategy…
Risk management is something I’m an absolute stickler about. I learned the hard way at the start of my career, so I want my readers to benefit from my experience.
Rigorous risk management enabled me to clock 20 winning years in a row. And Barron’s rated my hedge fund in the top 1% globally.
So here’s the other piece of my strategy… I use options.
Now, some folks may associate options with more risk, not less. But when you use them properly, you can achieve excellent results with options… while controlling your risk tightly.
A call option, for example, can help us profit if Bitcoin is about to rally. And a put option can help us profit even if Bitcoin falls.
That’s vital… Imagine raking in profits while Bitcoin is tanking.
And the best thing about buying options like this is that you know your maximum risk when you enter the trade.
If you only want to risk a few hundred dollars, that’s totally achievable. The most you can lose is the amount you spend to buy the option. So even if Bitcoin somehow goes to zero, you won’t lose more than what you paid.
Compare that to buying BTC directly if goes through a massive pullback…
And options enable us to grab outsized gains.
Since I’ve begun testing out my skimming strategy, I’ve helped traders bring in gains like 15.9%… 40.4%… 87%… and 100%. Even better, these gains often come in a matter of days or weeks. You’d likely have to hold Bitcoin for nearly a year to get similar returns.
So with all that explained, let me show you how it works in action… We did two Bitcoin trades earlier this month for subscribers of my advisory, One Ticker Trader.
So let’s check them out…
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Two Winning Trades
IBIT peaked and reversed on January 6. And the Relative Strength Index (RSI) technical indicator showed me that IBIT was vulnerable to a fall.
So we bought a put option to capture that move. Take a look:
iShares Bitcoin Trust ETF (IBIT)
Source: eSignal
And we were right. IBIT fell as buying momentum continued to wane.
We closed out half of our position just two days later for a 32.9% gain. We wanted to lock in some profits while keeping our exposure to Bitcoin in case it fell further.
And Bitcoin did keep sinking. That increased the value of our put option more. We closed out the remainder of our position on January 13 for a 61% gain.
That worked out to a blended gain of 46.95% on the trade.
To put that into context, if we’d bought $1,000 worth of IBIT put options, we’d have brought in a $469.50 profit. If we’d bought $5,000 worth of options, we’d have ended up with a $2,347.50 profit. And so on. Even better, this trade took just a week to play out.
But we weren’t finished there…
The RSI started swinging to the upside off a support level. So we opened a call option position on January 13 to capture any bounce.
IBIT gapped higher the following day. We closed out our call option position on January 14 for a 42% gain.
Take another look:
iShares Bitcoin Trust ETF (IBIT)
Source: eSignal
On a $1,000 investment, that equates to a $420 profit in a single day. And on a $5,000 investment, you ended up with a $2,100 profit. Again, in just one day.
As these trades show, options let us profit whether BTC soars or tanks. And we can tailor our position sizes to accommodate how much risk we want to take.
That’s key to becoming a successful trader.
If you’re interested in learning more about my Bitcoin skimming strategy, then be sure to check out my latest briefing.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict