The $IBIT Upside Collar:

Want to buy $BTC cheaper, but worried it rips higher w/o you?

This $IBIT #options strategy ensures you won’t miss the ride to All-Time-Highs

Here’s a detailed thread with:
· What you need to get started
· How this upside collar works
· Full risk/reward ฿reakdown 

฿itcoin & its ETF $IBIT has been trading in a range for the last 3 months from:

· Nov 15, 2024
· Feb 14, 2025

Maybe you’ll get lucky & can buy in lower. Or, maybe you just miss out on All-Time-Highs (ATH).

This “$IBIT Upside Collar” strategy uses options to hedge against FOMO if it breaks out of its 3-month range! 

What do you need to get started?

· Brokerage Account w/ Margin
· Options Trading Fully Enabled
· $50k worth of Stocks or ETFs

You also must be fully committed to buying more $BTC by April if it falls instead.

Doing so can make sure you’ll profit if new ATHs are reached beforehand.

So, how does it work?

There’s 2-Steps to this $IBIT Upside Collar:

1. Someone will pay you cash today if you promise to buy their $IBIT at the range bottom within the next 60 days

2. For that same cash received, someone else will sell their potential appreciation above the current All-Time High! 

From there, there’s only 3 things that could happen?

· If $BTC falls, you automatically buy lower

· If $BTC rips to all-time-highs, you profit

· If $BTC stays in a range, nothing happens
    (But you can set up the trade again)

Keep in mind, you get to choose your own timeframes & price levels.

Let’s learn how  

You can do this trade with ZERO money down using your stock portfolio’s equity that’s probably sitting dormant.

My friend made me this cool table below showing the price correlation between $BTC & $IBIT.

Here is the approximate top & bottom of the range that we’ll be focusing on:

$51 IBIT = $89k BTC
$63 IBIT = $110k BTC

1st: Collect $261 selling the April $51 $IBIT put option

This obligates you to pay $5,100 for 100 shares of $IBIT around April 17.

To clarify, your option buyer can “put” his $IBIT to you anytime beforehand.

But it rarely happens until around expiration. Not only that, but you can delay delivery if you haven’t saved up enough funds to take ownership of the shares. 

2nd step:

Take the $261 collected from selling the $51 put & use it to ฿uy a call option near the high of the recent range.

This ฿uys you the right to all the appreciation above $IBIT at either $62 or $63.

You can do one of the following for no-to-low cost:

· Collect $9 total for above $63
· Or pay $16 total for above $62

Downside/upside recap:

 If $BTC trades below $90k by April, you pay $5,100 for 100 shares of $IBIT even if it’s trading lower.

 If $BTC rips above $109-110k, then all appreciation above that price is yours to keep.

 If neither happens, then both options expire worthless & you keep $9 or lose $16. 

If nothing happens by April…
Run it back, Turbo!

You’ll ideally be saving up at your job & stacking dollars to dollar cost average anyway.

You can now pad your margin buffer w/ either:
· The cash you saved up
· Buying however many $IBIT shares you can

That way you may be able to go even bigger next month if you so desire.

If $BTC falls & you get assigned?

Your broker will automatically “put” the
100 $IBIT shares into your account AND:

– Deduct whatever cash is in there
– Create a margin loan for any shortfall
– Charge simple interest on the balance

Currently the margin interest rate is 5.85% annually at @Hood or @IBKR 

Remember…
You were planning to DCA anyway!

Worst case, any cash shortfall can be floated cheaply on margin until you get whole with your cash..

$5,100 x 5.85% / 12 months = $24.86/month for a full float if you couldn’t save up any cash.

Also, ideally, you have an emergency backup bridge loan in place from possibly a HELOC or 401(k). To clarify, I’m not saying you should be sapping your home equity to degen into Bitcoin. But using a HELOC as a temporary flash loan of sorts to make sure your brokerage account stays well out of any liquidation threshold is the purpose. 

Liquidation Risk?

Even with no backup, a diversified $50k portfolio w/ a $5,100 margin loan to carry the $IBIT could absorb a 70%-80% drawdown before a liquidation event occurs.

Check your broker’s margin maintenance & liquidation threshold.

But keep stacking to defray risk!

What if $BTC rips to ATHs?

then your call option print$!

The put you sold expires worthless, but remember that premium you got is now ballooning up inside an in-the-money call option. With the call option you can either:

– You can buy 100 cheap $IBIT shares at $61
– Or you can just sell the call for the profits 

$IBIT to the moon

Remember, you basically rented out someone else’s appreciation above the $62-$63 price range.

This $IBIT Upside Collar lets you lock in your buy price from the point of breakout while you DCA.

฿itcoin tends to rumble around in a range then go for a run!

This strategy is for those who:

· Think $BTC will moon
· Ok w/ $IBIT as a proxy
· Feel FOMO from underexposure
· Have steady cash flow
· Willing to dollar-cost-average
· Have equity in a margin account
+ Have backup borrowing capacity in place 
    (just in case your margin gets too tight)

If so… 

This ” $IBIT Upside Collar” allows you to patiently stack up your DCA dollars over multiple months,

All while contractually holding your place in line on ฿itcoin’s banana curve,

And doing so for little to no out-of-pocket cost,

Where your MAX risk is simply to commit to dollar-cost-averaging into $IBIT at a lower price!

Obviously, ฿itcoin’s price will fluctuate, but this strategy can work in different environments.

You can tweak the $IBIT Collar Strategy so you:
· Collect positive flow ASAP
· Capture more upside earlier
· Commit to DCA even lower
· Get more time to stack

You have #options! 

Hopefully this thread helps you fight FOMO and understand how to use options in a strategic way to help you get the level of exposure you want to Bitcoin at a price you can afford.