Bitcoin News Today: Bitcoin traders deploy structured options strategies ahead of $200,000 target

Bitcoin traders are heavily engaged in strategic options plays ahead of the year-end options expiry on December 26, with a significant portion of their positions tied to the $200,000 price level. However, the implied probabilities attached to these high-strike options suggest that most traders are not fully expecting a 72% rally from current levels [1].

The total open interest in call options for December stands at $6.45 billion, significantly outpacing put options at $2.36 billion. This dominance signals a general bullish bias among market participants, although bearish traders are also active, with nearly $900 million in put options targeting levels between $50,000 and $80,000 [1]. These bearish positions indicate that while optimism is present, so is caution.

Many of the high-strike call options—particularly those with strike prices above $170,000—require a 46% price increase from current levels to finish in the money. If Bitcoin trades near $116,500 at expiry, only $878 million of call open interest would retain value [1]. This highlights the limited chances of profitability for those holding outright bullish calls.

Instead of straight long calls, traders are increasingly employing structured options strategies like the Call Diagonal Spread and the Inverse Call Butterfly. The Call Diagonal Spread involves buying a long-dated $200,000 call while selling a shorter-dated $200,000 call, typically expiring in October. The strategy profits if Bitcoin rises above $146,000 by October 31, with the long call gaining value while the short call expires worthless. However, if Bitcoin rises above $200,000, the trade can begin to incur losses [1]. Maximum profit is limited to BTC 0.0665 (around $7,750), while the maximum loss is BTC 0.005 (about $585) at current prices.

The Inverse Call Butterfly is another popular strategy, combining a long $140,000 call, two short $160,000 calls, and a long $200,000 call—all expiring in December. This position reaches peak profitability if Bitcoin settles near $160,000 on Dec. 26, netting approximately BTC 0.112 (around $13,050). However, the trade starts to lose money if Bitcoin exceeds $178,500, with the $200,000 call helping to cap potential losses [1]. Maximum loss in this case is 0.109 BTC, or about $12,700.

The implied probability of Bitcoin reaching $200,000 by year-end, as reflected in the $200,000 call price of BTC 0.007 (around $814), is under 3%. In contrast, the $140,000 call, priced at BTC 0.051 (about $5,940), implies a 21% probability of profitability [1]. These figures suggest that while the $200,000 call may attract attention, it represents a low-probability, high-reward scenario rather than a widely held market expectation.

According to Polymarket, the market’s odds of Bitcoin reaching $200,000 by the end of the year stand at 13% [1], which is higher than the implied probabilities in options pricing but still indicates that such an outcome is not the consensus view.

Traders are therefore not betting the farm on a 72% rally. Instead, they are using far out-of-the-money calls as components of structured strategies that offer leveraged upside with defined risk. These tactics allow traders to express bullish sentiment without exposing themselves to the full downside risk of a failed rally [1].

Source: [1] Traders bet on $200K year-end Bitcoin, but real odds tell a different story (https://cointelegraph.com/news/traders-bet-on-200k-year-end-bitcoin-but-real-odds-tell-different-story?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound)