Three Simple Ways To Trade the Ethereum Merge!
The entire blockchain industry is talking about the upcoming Ethereum merge in September, and the potential arbitrage opportunities it could bring about.
Our past posts have explained what the merge is all about and the opportunities and risks associated with a fork after the merge.
This time around, we’re breaking down a few key trading strategies that users can use as the merge rapidly approaches.
If you think Ethereum is going up, the most direct way to trade the merge is to simply carry out a spot trade and buy ETH, selling it after the merge occurs. While the price of Ethereum has increased by 25% over the last month or so, experts say it’s hard to really know where it’ll land after the merge.
What is clear, however, is that the merge will lay the groundwork for future upgrades that alleviate Ethereum’s congestion problems and accelerate transaction speeds, positioning it for further adoption and long-term price appreciation. Another option is to buy call options on Ethereum and exercise them when it goes up, enabling you to profit off of the price difference.
For those of you who think that the price of Ethereum will simply trade sideways over the next few months, you could employ a simple “short straddle” strategy using options contracts on the Huobi Global platform. This involves selling both a put and a call option for Ethereum, with the same strike price and expiration date, enabling you to make money off of the premiums if the price continues to go sideways.
The downside, however, is if the price of Ethereum plunges or skyrockets, and those options are exercised. If Ethereum continues to go up in price, then you could be exposed to unlimited downside.
This is a bet on volatility. You think Ethereum will either plunge or skyrocket in price, but aren’t sure which way just yet. By buying both call and put options, you purchase the optionality to capitalize on either price movement, and your risk is limited to what you pay for the option premiums.
If Ethereum goes up, you exercise the call option; if it goes down, then you exercise the put option. In either scenario, your downside is limited to the option premium of the other side of the trade.
🔹Where To Buy Ethereum Options?
Try Huobi Options. Huobi Options include European spread options, American options, and touch options, and will expand to include more product types and cryptocurrencies in the future. Not only do we offer options on Bitcoin and Ethereum, but we also offer them for Dogecoin!
Try Huobi Options out on the Huobi Global app:
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