Week 14, Trade 14 : $SOL & $ETH Options, Long $GOAT & Algorithmic Yields
Market is buoyant yet cautious but second half looks bullish before the election madness
📈 Week 14, Lesson 14
“Trading doesn't just reveal your character, it also builds it if you stay in the game long enough.” Yvan Byeajee
We are into Week 14 of the Fifty Two Trades in Fifty Two Weeks. Thank you for reading.
“The 52” deep dives into one trade every week, targeting traders with zero or little trading experience. But I hope that my pro trader friends find this as useful. For details on why I am doing this and who is this for, please read the About section on top, which I will update from time to time.
Most trades that we take will be medium (3-4 weeks) to long term in nature. We might do some swing trading here and there if opportunity presents, but always with proper risk management. After all, our purpose is to make money, not lose sleep over it.
You can track our trades and progress live here at this Link
Over 10 years in banking and now 12+ years dealing with nuances of crypto, I have learned some very hard lessons. I intend to share them transparently as we go. More importantly, please keep the comments and feedback coming, so I know we are on the right track together.
📊 Portfolio Update - Open Trades
$BTC has finally breached the significant $65,000 resistance and as we write, it is now comfortably holding around $67,000, positioning itself for what could be the next major upward surge to the ATH. However, one factor that could potentially dampen this momentum is the escalating geopolitical tensions between Israel and Iran, which may introduce uncertainty to the market.
That said, with $BTC surpassing $67,000, our ROI since inception has reached an impressive 151%, delivering an outstanding annualised return of over 500%. That is no small feat in one of the weakest quarters for this year. The returns below are on a monthly basis foals.
With the market set for a potential surge after the elections, we’re holding a significant amount of dry powder, ready to deploy once we receive a confirmed breakout signal. Here’s where our current portfolio stands:
Let’s take a closer look at our open positions:
Trade 1: $BTC Options – Buy Call, Sell Put
Status: Holding the Call and Squared Off the Put
P&L: The effective net premium for $1,722, and now it’s worth $5,747, giving us a profit of over $4,000. With the option expiring at the end of the year, we expect Bitcoin to hit new ATH before it expires and increasing our overall return on the trade.
Trade 2: $BTC Options – Buy & Sell Call, Sell Put
Status: Holding Call Buy & Sell, Squared off Put Sell
P&L: We started with a $1K net premium, and after closing the Put, we’ve increased it to $1.5K, reducing our downside risk. With Bitcoin now at $67K, the Call buy is worth $7K, while the Call sell is at $869. Since this trade expires in 10 days, we expect minimum profit of about $4.6K.
Trade 3: $BTC Options – Buy & Sell Call, Sell Put
Status: Holding
P&L: This trade had no upfront cost (net premium is zero) and could yield $7K if Bitcoin crosses $70K. So far, we are up $3.2K on this trade. With the option expiring next month, we’re keeping a close watch and may close early if necessary.
Trade 4: Spot $SUI
Status: Sold 75%, Holding 25%
P&L: After a strong rally, we sold half of our $SUI position at $2.26, securing a 25% profit, which was shared with our Telegram community. Over the past 2-3 days, there has been growing uncertainty around $SUI, especially due to rumors of insiders selling $400M worth of tokens.As a result, we closed another 25% of our position at $2.10 and adjusted our stop loss to $2.00, while closely monitoring the situation.
Trade 5: Spot $FTM
Status: Holding 100%
P&L: Our position is up 16%. $FTM hit $0.79 but pulled back to $0.75. If the war escalates, we could see the market shift into a rapid downtrend. Hence, we're staying vigilant and closely monitoring the situation to time our exit appropriately. To mitigate losses, we’ve adjusted our stop-loss to the entry point of $0.65.
Trade 6: Spot $SOL
Status: Holding 100%
P&L: We’re up 10%, with $SOL crossing $150. Again, we have increased our Stop Loss at the entry point of $140.60. And we’re watching the market closely for a good exit, so keep an eye on our Telegram for updates.
Trade 7: Spot $MORUD
Status: Sold 50%, Holding 50%
P&L: This was one of our high-risk plays. We entered at around a $900K market cap, and the token shot up to $17M. We sold half our position when the market cap hit $10M, a quick 10x return. Now the market cap is around $8M, and we’re monitoring it closely for the next exit point. Stay tuned on Telegram for real-time updates.
We continue to navigate the market cautiously, balancing between risk and reward. Stay tuned for more updates as we adjust our positions based on market conditions.We’ll continue to monitor the open positions closely and adjust as needed to navigate the range-bound market effectively. Stay connected on Telegram for real-time updates and insights.
If you have any questions, ideas, or feedback, please feel free to DM me on Substack or Twitter, Let's continue to navigate the market together!
🌎 Quick Macro & Crypto TL;DR
THE GOOD:
Inflation, measured by the Core PCE index, is currently sitting at 2.7%, a level that's considered acceptable for now, keeping concerns about runaway inflation in check.
China has unveiled its much-anticipated stimulus, but the package fell short of the expected $1 trillion. However, we believe this is just the beginning—further stimulus measures are likely in the pipeline.
THE BAD:
Jobless claims jumped to a 14-month high at 258k, with continuing claims rising to the highest level since late July at 1.86 million.
THE UGLY:
Escalating geopolitical tensions between Israel and Iran are adding a layer of uncertainty. Israel’s response to the situation will be pivotal, as it could have significant global repercussions depending on how the conflict evolves.
For more regular insights into macro and crypto trends, subscribe to our weekly newsletter: 5-Minute Macro and Crypto Weekly.
📈 Week 14, Trade 14: BUY & SELL $SOL OPTIONS, LONG $GOAT & ALGORITHMIC YIELDS
The macroeconomic landscape is currently looking favorable, and we believe it sets the stage for a potentially significant rally. Here’s a breakdown of the key factors influencing our decision to maintain our open trades and move forward with a strategic options approach.
1. China’s Stimulus Boost: China recently announced a much-anticipated economic stimulus. We believe this is just the first step, with further stimulus measures likely on the horizon. This kind of economic boost from China could help stabilize global growth concerns and inject fresh liquidity into the markets, benefiting both equities and risk-on assets like crypto.
2. Trump Gaining Momentum on Polymarkets: Political uncertainty is always a factor, but betting markets like Polymarket are currently showing a 10% lead for Donald Trump over Kamala Harris. For now, the possibility of a Trump victory adds optimism to the markets, particularly for U.S. tech stocks and cryptocurrencies, which could see substantial upside.
3. Inflation Remains Under Control: At the moment, inflation seems to be well under control, with the Core PCE index showing a moderate 2.7%. This is within an acceptable range, which supports the “Goldilocks” scenario—a not-too-hot, not-too-cold environment where inflation isn’t high enough to prompt aggressive rate hikes, but low enough to encourage economic growth. As long as inflation stays in check, markets are likely to continue their positive momentum.
War Escalation Remains a Concern
While the macroeconomic outlook is positive, we cannot ignore the ongoing geopolitical tensions between Israel and Iran. We estimate a 50-50 chance of further escalation, which could trigger significant market volatility.
Despite this risk, we feel confident in our current positions, having secured profits of up to 130% since inception. If the conflict intensifies, a market pullback is likely, but we’re prepared. We’ve set our stop losses at the entry points of our trades, ensuring that we protect those gains should a major shakeout occur.
Why $SOL & $ETH Options Over $BTC Options?
We’ve opted for a $SOL options trade instead of $BTC primarily because we expect $SOL to show higher volatility, no matter the market direction. Whether the market rallies or dips, $SOL tends to have more dramatic reactions, making it ideal for our options setup.
On the other hand, $ETH has been significantly oversold. We foresee a potential rally, especially with Larry Fink's recent mention of $ETH during the BlackRock earnings call. This kind of endorsement could provide the momentum $ETH needs for a solid breakout.
TRADE 1 SETUP - $SOL Options for 29th Nov. Current Spot @ $157:
Sell $SOL Put Option at $130 – Premium Received: +$5.80 per Option
Rationale: If the Israel-Iran conflict escalates, $SOL's price might drop. We feel that $130 would be a strong entry point, as $SOL has long-term upside potential, especially post-elections.
Buy Call Option at $165 – Premium Paid: -$10.9 per Option
Rationale: If geopolitical tensions stabilize, $SOL could rally significantly. This call option allows us to capture any substantial upward movement.
Sell Call Option at $190 – Premium Received: +$5.20 per Option
Rationale: We aim to offset the cost of the long call option by selling a call at $190, a key resistance level for $SOL. This offsets some of the premium we’ve paid for the long call.
All Options Expire on 29th November and we may close the trade as we the market move
Risk and Reward:
Premium Received: $0.10 per Option
Upside Potential: If $SOL rallies between $165 and $190, we could gain an additional $25 per Option.
Downside Risk: If the conflict escalates, we would be buying $SOL at $130, which we consider a good value under the current market conditions.
TRADE 2 SETUP - $ETH Options for 1st Nov. Current Spot @ $2,632:
Sell $ETH Put Option at $2,500 – Premium Received: +$52.49 per Option
Rationale: In the event of escalating tensions, $ETH might dip. However, $ETH at $2,500 is an attractive buy, particularly with Larry Fink backing it through BlackRock.
Buy Call Option at $2,700 – Premium Paid: -$81.31 per Option
Rationale: If tensions ease, $ETH could see a strong rally. This call option captures the upside if $ETH breaks out.
Sell Call Option at $2,900 – Premium Collected: +$31.51 per Option
Rationale: We sell a call at $2,900 to reduce the overall trade cost and risk. This level has acted as a resistance for $ETH, making it a strategic point to cap our exposure.
All Options Expire on 1st November and we may close the trade as we the market move
Risk and Reward:
Premium Received: $2.69 per Option
Upside Potential: If $ETH rallies between $2,700 and $2,900, we could gain an additional $200 per Option.
Downside Risk: If war fears push markets lower, we would buy $ETH at $2,500, which we believe is an excellent entry point given its current conditions.
TRADE 3 SETUP - Long $GOAT Spot
We're back with another high-risk, high-reward play, but this time it's a little different. The memecoin we're talking about was actually created by an AI—an AI with the goal of becoming rich.
There’s an intriguing story behind this and if you’re curious, you can read my detailed write-up on $GOAT here. To summarize briefly, two AIs started talking, and out of their conversations emerged a meme religion—The Goatse Gospel. This was then aggressively promoted by an AI called Truth Terminal.
Enter Marc Andreessen, the tech billionaire known for backing bold, futuristic ideas. While browsing Twitter, he came across Truth Terminal’s relentless push for the Goatse meme gospel. Instead of ignoring it, Marc sent $50,000 in Bitcoin to help the AI “break free.”
This event sparked the launch of the $GOAT token, which now has a market cap of $280 million, and the rest, as they say, is history.
Here’s the trade we shared in our Telegram as it happened (so join here to never miss out):
Entry Price: $0.13
Market Cap at Entry: $130M
TRADE 4 - Algorithmic Yields on $SOL via Orca LP Pools
Our prop quant algos are in full swing as well. We have deployed $5,000, and in just 15 days, we’ve generated over 5% returns, equating to a 120% APR.
Here’s how we do it: We provide liquidity for the SOL/USDC pair on Orca & Meteora, but with a strategic twist. Instead of offering liquidity across the entire spectrum, we focus on specific price ranges tied to 5x leverage liquidation levels.
Our algorithm continuously adjusts these ranges to ensure we capture the highest possible yields. We can do this effectively on SOL because the gas fees are extremely low, allowing for frequent adjustments without incurring significant costs.
💡 CONCLUSION
In this week’s trade recap, we’re going for a $SOL & $ETH options play that with a high risk bet on $GOAT, here's how it panned out:
$SOL Options Trade Breakdown
Sell Put Option at $130: This generates a premium of $5.80, providing the primary income for this trade. If $SOL stays above $130, we keep the premium, but if it drops below, we’re comfortable buying at that level.
Buy Call Option at $165: This cost us $10.90 but gives us exposure to potential gains if $SOL moves above $165.
Sell Call Option at $190: Selling this option collects an additional $5.20, capping our gains above $190, but reducing the cost of the call option purchase.
All the options are expiring on 29th November
Net Impact:
Total premium earned: $0.10 per strategy.
With 1,000 contracts, we’ll net $100 from premiums.
Additional potential upside: If $SOL rallies, we could gain $25 per option on any move between $165 and $190.
$ETH Options Trade Breakdown
Sell Put Option at $2.5K: This provides a premium of $52.49. We’re betting that $ETH will stay above $2.5K, but we’re comfortable buying it at that level if the price falls.
Buy Call Option at $2.7K: This option cost us $81.31 and gives us the chance to profit if $ETH climbs above $2.7K.
Sell Call Option at $2.9K: Selling this call brings in $31.51 and reduces the overall cost of the long call while capping gains above $2.9K.
All the options are expiring on 1st November
Net Impact:
We're earning a premium of $2.69 per strategy
With 10 contracts, we’ll net $26.90 from premiums.
Potential upside: If $ETH rallies, we could gain $200 per option on moves between $2.7K and $2.9K.
LONG $GOAT
Entry Price- $0.13
Stop Loss- $0.25
Take Profit 1- $0.50
Take Profit 2- $1
ALGORITHMIC YIELDS
Generated over 5% in 15 days by providing liquidity to $SOL/USDC pair via Orca & Meteora.
Stay tuned for more updates and insights!
You can track all our trades here.
Now go grab a coffee and please DM for any questions. Keep in mind, this is NFA and DYOR.
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