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- Monday Alpha #23
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TL;DR: Trump Speech & Bitcoin Outlook
BTC ATM IV
1W: 55.50%
1M: 53.79%
3M: 57.39%
6M: 61.23%
Index Price: $68,880
DVOL: 54.83
ETH ATM IV
1W: 57.28%
1M:59.88%
3M: 65.17%
6M: 68.85%
Index Price: $3,330
DVOL: 61.29
Weekly Insights from GreeksLive
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Some interesting multi-leg strategies came through the tape on GreeksLive within the past 2 week. Tons of variety in the plays with size.
Number 3, a call spread, is cashing big right now. Block trades are a easier way to get off size, in one chunk, allowing the trader to pay less fees and get into position all at once. Rarely does size trade on screen, besides a handful of instances. Let’s go over it.
Block trades are public, and anyone can do one if they have size. Size varies, but the standard is 250x ETH, 25x BTC. If it’s a spread, lets use a BTC call spread for this example, it’s minimum 12.5x on each leg, adding up to 25x.
Let’s say a trader wants to buy 50x BTC calls, they send off an RFQ (request for quote), this order is public and all makers can compete for the flow by providing the best price. For the most part, this is all done programmatically on the makers side. There are some instances where an OTC deal is done over messaging app for altcoin vol, or exotics.
There is a few people who trade size on screen. There is a huge ETH call seller that gets off around 50,000x size on screen. He puts it on screen for anyone to take, all you can eat. There is speculation on why they don't block these orders… but we can leave that for another day.
Check out the GreeksLive Block Marketplace to slang some size and get filled at once.
We’re going to switch this week up with a longer-form Marty's Thoughts and leave the charts for another day. I have gotten tons of DM's and questions in the FREE AND PUBLIC TELEGRAM CHANNEL so we will just discuss them here. You can join the TG here: https://t.me/optionswithmarty
Mind you there is never a paid group, all information is free and we will never ask you for money.
In our last newsletter we wrote the following: "This can change instantly with front-end getting lifted over 100v… Careful not to chase this mania (if it happens) as it will sell off hard after the announcement. The good ol’ vol crush.” I wrote this in more speculation on the ETH ETF, but played out either way.
Trump spoke on Saturday, so any near dated expiry that covered his talk had insanely lifted vols. The Sunday contract was trading 125v+ ATM, which is crazy high. After his speech, vols got crushed (SHOCKING) and the day settled at 50v, a normal day.
This happens every time when there is uncertainty in the market — vols rise and then get crushed post event. This is a strategy anyone can pick up and play. You buy before the event, and sell right before the event, you want to make sure that your expiry is covering the event. So if his speech was on Saturday, you DO NOT want to buy the Saturday contract, you want to buy the Sunday expiry. This happens with all events, speeches, FOMC, etc. The trick here is to bank the profit BEFORE THE EVENT, NOT AFTER.
BTC Implied Volatility During Trump Speech
Some visuals below showcasing the vols reaching highs of 125v+ ATM during the speech.
BEFORE Trump speech
AFTER Trump speech
Charts from VeloData: https://velodata.app/
Marty's Thoughts on Trump Speech
Next, price… I rarely trade directionally. But with all the hype surrounding Trump and his speech I feel the need to comment.
I have said before…. I think BTC goes up forever against fiat. That being said, its great to get some more attention on the space as a whole, and the more people that participate in it, the better. Though with more institutional participants, crypto will become a lower vol product. You guys wanted the institutions to come, now they are here, do not complain.
Ok, now that I’ve outed myself as a perma-bull on price, I’m not 100% sold on Trump’s speech. I’m not a BTC maxi any longer, and I do not think the world is ending or that we will use BTC as means of payment in the future, though BTC is more an asset class and people will allocate a portion of total portfolio to it.
Trump’s speech at the BTC conference was just telling potential voters AT A BTC CONFERENCE, what they wanted to hear about BTC. You can tell who is going to vote for Trump because they say DONALD J. TRUMP, they have to put the J in there. He is a salesman at the end of the day, and will tell people anything they want to hear to get their vote. People got mega long on this speech, I am not sure its the best thing to do on leverage, probably best to play with spot, and as I write this, top longers are getting rinsed with a 2k candle down just this morning in the US session.
Note: After writing this article, the following news came out — “US Gov moves ~30k BTC ($2B) worth of Bitcoin”. The thots below were written before these news came out.
The US gov already holds/seized a lot of BTC, and they auction it off periodically, but it’s not like they are fire selling it like the German government did. I think the US gov holds ~250k BTC now, so adding another 750k BTC and NOT selling it seems somewhat plausible. But, I do not think that printing more money to buy BTC solves the US problem. I think that holding whatever its going to be, 250k BTC, 1mm + BTC is probably a smart idea in the end, lets just see how they execute.
I do not bullieve that BTC solves the 35 trillion dollar deficit in the US. I do bullieve that the US was built on innovation — and that being in it's current state of ANTI CRYPTO is simply anti-innovation.
It would be good to see clearer tax guidance and overall laws around crypto and what is a security and what is not, it has been long enough, and they need to come out and be more clear on their position. The US now has crypto ETFs, futures, options on the futures, and soon options on the ETFs themselves, it’s clearly time to have clearer guidance as a whole on the entire sector.
Ok, sorry for the short book… I thought it was fair to be vocal about my views and opinions here on this platform. We have about 4000/5000 email sign ups here, and I get tons of great feedback from the newsletter. If you guys wanna chat more, ping me on X or in our Telegram group, I am always happy to hear the other side!
Wrap-Up
Recap:
Post ETF world
Trump and US Stance on crypto changes?
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