Crypto Block Flow 6/26/22–7/3/22

Call butterflies? 🦋 🦋

Yep, we’re at the point where traders are using call butterflies in an effort to make some scratch. That is what we saw at Paradigm last week. The most common structure traded, based on the number of trades, was call flys.

Without looking at the strikes, the assumption could be that traders are grinding it out. Butterflies can be considered decay strategies. Traders are looking for the market to move sideways to slightly higher as they’re positioned short an ATM middle strike, the body, while long ITM lower and OTM high strikes, the wings.

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This could be a call that a bottom is forming. Sideways is better than lower, eh?

My hunch? I’m not making any calls whatsoever but considering the spike in bad news, it could be worse price-wise. How many more bangers are out there? No idea. The chatter of an unknown number of crypto exchanges operating through their own insolvencies is discouraging. More shoes may be ready to drop.

Keep your head on a swivel. New opportunities are sure to arise and, as always, be mindful of thought rigidity. A closed trap catches no game. Be open.