A bitcoin options trader established a multimillion-dollar position with an unusual constraint: the trade generates maximum profit at $95,000 but faces total loss if the price reaches $100,000 or higher by October 30.
The position cost $3.17 million to establish through liquidity network Paradigm. The trader combined three October 30 call options at strikes of $90,000, $95,000, and $100,000, purchasing calls at the lowest and highest prices while selling twice as many at the middle strike. This structure, known as a long call butterfly, creates a payoff profile that peaks at the middle strike and diminishes toward the upper boundary.
How the Trade Works
Unlike a straightforward bitcoin purchase, where holders benefit from any price increase, a butterfly spread generates profits within a narrow band. The calls sold at $95,000 create offsetting obligations that limit gains as prices climb higher. According to the Options Industry Council, the position reaches maximum profit at the middle strike at expiry, but loses the initial premium at or beyond either outer strike.
Timing and Settlement
The trade's outcome depends on bitcoin's price specifically on October 30 at settlement, not on intraday movements beforehand. The holder could adjust or close the position before expiry, and any eventual payout must first cover the $3.17 million investment plus trading costs.
The Broader Context
The reported transaction does not indicate whether this position represents the trader's entire bitcoin outlook or accompanies other holdings. The structure illustrates a paradox common in options trading: an investor can correctly anticipate a rally yet lose money if the final price lands outside the targeted range. For this trader, whether bitcoin finishes at $95,000 or substantially higher will determine whether the bet succeeds or fails.
