Larry’s Note: Yesterday morning, I shared about the December money frenzy that’s now just days away. I’m leaving that video online for just a short time… because if you’re not already in a trade by early next week, it’s too late.
The key aspect of this opportunity is that it goes by quickly, so you’ve got to be in it ahead of time.
If you want to take part in what could be your fastest gain of the year, don’t wait. Go right here to make sure you know how to take advantage of the coming frenzy.
Bitcoin’s (BTC) surge through the $100,000 level captured attention – not to mention headlines.
And no doubt plenty of BTC bulls patted themselves on the back.
After all, not that long ago, BTC trading at $100,000 was just a crazy prediction.
Yet a huge surge came off the back of Donald Trump’s win. Trump branded himself as pro-Bitcoin and wants the U.S. to be the global leader in digital finance.
But with BTC trading so high, how can you take part in any future BTC moves without blowing up your account if things go wrong?
It’s no secret that cryptos can reverse sharply. And crypto “winters” have seen Bitcoin and other cryptos lose 60%, 70%, or even up to 80%.
But that’s why I trade BTC differently than most.
The way I do it can spruce up your returns. But importantly, this strategy also puts a clear cap on risk…
Risk Management Before Profits
For some folks, risk management is just an afterthought.
They’re too interested in all the money they can make rather than worrying about what happens if things go wrong.
And believe me, when I started out in the markets 40 years ago, I did exactly the same. I blew up multiple trading accounts before I figured out that risk management is at the heart of any successful trading strategy.
Understanding that put me on track to where I am today…
Not only did I go on to have 20 successive winning years in a row, but Barron’s ranked my hedge fund, Banyan Capital, in its top 1% globally.
That led to Jack Schwager featuring me in his book Hedge Fund Market Wizards along with successful traders like Ray Dalio and Joel Greenblatt.
And now I apply the many lessons I learned during those years to crypto…
The way I trade BTC differently from everyone else is that I don’t trade BTC at all…
Instead, I trade products that give me exposure to the Bitcoin price. This way, I can effectively trade BTC without ever having to own it.
And believe me, that’s an important distinction…
If I owned BTC outright, I’d run the risk of storing my holdings in a digital wallet or with a crypto exchange
If I forgot my password or lost my wallet, then my money would evaporate into thin air.
Plus, we’ve also seen enough heartache in the news about crypto fraud, theft, and Ponzi schemes – not to mention crypto exchanges being hacked or collapsing.
For someone whose career was made on strict risk management, it’s simply too much risk…
Bigger Returns, Less Risk
That’s why rather than owning BTC directly, I trade it through stocks or exchange-traded funds (ETFs) that move in response to BTC.
One example is the ProShares Bitcoin Strategy ETF (BITO). This ETF tracks the futures price of BTC. Other examples include the Bitcoin spot ETFs, miners, and exchanges like Coinbase.
And because these stocks trade on a regulated exchange, it means that you can access them through a regular brokerage account.
And my strategy has enabled me to bag an 87% gain in just five days. That was a period where BTC only gained 13.5%.
Another time I made my subscribers a 72.3% return when BTC fell 18.7%.
And in September, we closed out a BTC trade for a 100.0% gain.
Not only can we generate outsized gains, but we did so by trading BTC in both directions.
Of course, we don’t win all the time. (No one does!)
But with my strategy, I know ahead of time what my maximum loss could be – and it’s far less than trading BTC directly.
That’s because I trade my strategy through options.
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Using Options to Minimize Risk
Here’s how it works…
If I think BTC is going to rise, I buy a call option. Buying a call option enables me to gain exposure to a BTC rally at just a fraction of the cost of buying BTC directly.
And if the move I planned for doesn’t come off, the most I can lose is the option premium.
The same is true if I buy a put option. A put option enables me to gain exposure to BTC falling.
Again, if the planned move doesn’t go my way, the most I can lose is the premium.
The main risk of trading BTC through options like this is time decay. Time decay erodes the value of your option as it nears its expiration. If the planned move doesn’t come off and you hold the option until expiry, the option will likely expire worthless.
But you can also exit your position before expiry to recoup some premium.
So, next time you think BTC could be ready for a big move, remember that you don’t have to trade BTC directly…
Instead, you can use a stock or ETF on a regulated exchange.
And by trading BTC through options, you can gain exposure to moves in both directions while always having a clear cap on your risk.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict