How does the futures butterfly strategy work in the context of cryptocurrency trading?

1 answers

• Dec 26, 2021 · 3 years ago
  In the context of cryptocurrency trading, the futures butterfly strategy can be implemented by selecting three futures contracts for the same cryptocurrency with different strike prices. Traders would buy one contract with a lower strike price, sell two contracts with intermediate strike prices, and buy one contract with a higher strike price. This strategy aims to profit from the price differences between the three contracts. However, it's important to note that the success of this strategy depends on various factors such as market conditions, liquidity, and accurate price predictions. Traders should carefully analyze the cryptocurrency market and consider risk management strategies before implementing this strategy.
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