Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
I decided to start purchasing IBIT calls.
Will ease into a position, but too cautious to buy out-of-the money.
Bought $50 calls for may 2025...will report on the progress..did it just for fun (and a potential 10X leverage
)
Would have bought Nov-Dec instead, but they are not available yet.
Jan 2026 calls are super expensive.
Will ease into a position, but too cautious to buy out-of-the money.
Bought $50 calls for may 2025...will report on the progress..did it just for fun (and a potential 10X leverage
)Would have bought Nov-Dec instead, but they are not available yet.
Jan 2026 calls are super expensive.
can you please tell me more about call options? Right now IBIT trades for $55,21 if I'm right. Does the IBIT price increases with the bitcoin price? Does that mean you can buy a IBIT share for $50 even if the IBIT price reaches let's say $100? And how do you leverage that? so many questions
Let's say you paid $13 per $50 May 2025 IBIT call contract...you spend $1300 ($13X100=1300).
If, for example, bitcoin would be 190k on May 15, 2025, you would have two possibilities;
1. Sell your call contract for about $110 (as 190K is double btc price of 95k and IBIT price would be at about $110; as the option time premium would be almost zero) per contract (aka 110X100=$11000).
Voila..you made $11000-1300=$9800, which is more than 8X your investment, albeit bitcoin price "only" doubled.
2. You may exercise your call...would have to pay additional $5000 (for a total of $6300), but would now have 100 shares of IBIT worth about $11000. You can keep the shares or sell them at any time after the "exercise"
The downside: if bitcoin will be at about 90K or below on May 16, 2025 (more accurately, IBIT at $50 or below), your investment would be worth nothing (zero).
Typically, people don't keep options until the last day,unless they want to exercise.
If you don't sell your call option and the IBIT price is above $50, the exercise is automatic and you would have to pony-up $5000 (for a 100 shares).
None of the info above is an investment advice.