MDB on Nostr: Could this be happening? For example with an institution like BlackRock? Controlling ...
Could this be happening? For example with an institution like BlackRock?
Controlling Bitcoin Price within a Range Using Spot ETFs & Options?
1. Spot ETFs:
- Buy to raise price: Accumulate Bitcoin in the ETF to reduce market supply and drive up prices.
- Sell to lower price: Distribute Bitcoin to increase supply and put downward pressure on prices.
- Issuance/redemption: Redeem ETF shares to remove Bitcoin from circulation (raising prices) or issue more shares to add supply (lowering prices).
2. Options:
- Call options to push price up: Buy deep in-the-money calls, forcing market makers to buy Bitcoin to hedge, creating upward pressure.
- Put options to push price down: Buy deep in-the-money puts, forcing market makers to sell Bitcoin to hedge, driving the price down.
- Short calls/puts: Selling calls adds downward pressure, while selling puts adds upward pressure.
3. Maintaining price range:
- Upper limit: Near the upper limit, sell Bitcoin from the ETF and buy puts or sell calls to prevent further price rise.
- Lower limit: Near the lower limit, buy Bitcoin in the ETF and buy calls or sell puts to push the price up.
4. Market sentiment: Large options trades influence market sentiment, driving participants to follow your price direction.
5. Hedging and rollovers: Continuously roll over options contracts and hedge positions to sustain control over the price range.
Controlling Bitcoin Price within a Range Using Spot ETFs & Options?
1. Spot ETFs:
- Buy to raise price: Accumulate Bitcoin in the ETF to reduce market supply and drive up prices.
- Sell to lower price: Distribute Bitcoin to increase supply and put downward pressure on prices.
- Issuance/redemption: Redeem ETF shares to remove Bitcoin from circulation (raising prices) or issue more shares to add supply (lowering prices).
2. Options:
- Call options to push price up: Buy deep in-the-money calls, forcing market makers to buy Bitcoin to hedge, creating upward pressure.
- Put options to push price down: Buy deep in-the-money puts, forcing market makers to sell Bitcoin to hedge, driving the price down.
- Short calls/puts: Selling calls adds downward pressure, while selling puts adds upward pressure.
3. Maintaining price range:
- Upper limit: Near the upper limit, sell Bitcoin from the ETF and buy puts or sell calls to prevent further price rise.
- Lower limit: Near the lower limit, buy Bitcoin in the ETF and buy calls or sell puts to push the price up.
4. Market sentiment: Large options trades influence market sentiment, driving participants to follow your price direction.
5. Hedging and rollovers: Continuously roll over options contracts and hedge positions to sustain control over the price range.