Bitcoin Rally Presents Rare Chance to Buy Cheap Downside Protection
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Put options for bitcoin are trading cheap compared to historical levels, presenting an opportunity for bulls to buy downside protection.
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The ratio between implied volatility for out-of-the-money puts and at-the-money options has dropped below 1.
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Cheap puts are rare as volatility for these contracts is usually higher than at-the-money options.
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The discount comes as traders add bullish exposure amid bitcoin's price rally.
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The window to buy inexpensive hedges may be short as puts seldom trade at a discount for long periods.