Trade 3. BTC Knock-Out Forward (KOF) for Dip Buyers

Trade 3: BTC Knock-Out Forward (KOF) for Dip Buyers

Simulated price example:

Current Spot Price: 62,000 USD

Discounted Price: 55,000 USD (~11.3% discount)

Knock-Out Barrier: 80,000 USD

Maturity: 9 weeks

Overview:

Capitalizing on a potential rebound in Bitcoin's price after its recent correction, a KOF offers opportunity to buy at a discounted price with a buffer against losses.

How It Works:

•⁠ ⁠With the spot currently at 62k USD, a BTC KOF allows you to buy BTC at 55k USD.

•⁠ ⁠As long as the BTC price remains below 80k USD, you will make profit or loss as if you bought BTC at 55k USD.

•⁠ ⁠If the BTC price exceeds 80k USD at any time before maturity: The trade will be knocked out, resulting in no profit or loss for you.

Rationale:

•⁠ ⁠Buffer Against Losses: Unlike a traditional spot trade where losses occur immediately with price declines, the KOF provides a buffer until the BTC price falls below 55k USD, offering protection during volatile periods.

•⁠ ⁠Expecting a moderate rebound in the BTC price but not anticipating a surge beyond the knock-out barrier in the next 9 weeks. Various factors such as slowed ETF inflows, a stalled and exhausted market, elevated interest rates, geopolitical risks, and general risk-off sentiments are likely to cap the potential of any crypto market's recovery.