The Puzzles of Bitcoin Options for Ordinary Investors
The landscape of Bitcoin investing is littered with peculiarities. One of the oddest is the bizarre trade in options on Bitcoin equities.
Posts in the Real Markets: Applying Market Theory Category at Psychological Investor, Page 2
Investment ideas and observations about the real markets we know and love.
How to Lose Money with a Bitcoin Investment, Part 2: The Unhedged Short
As I described in an earlier article, many investors holding Bitcoins naturally look for ways to put those Bitcoins to work, and several worthwhile opportunities are available. But there’s also a whole class of investments which carry quite a potential sting in their tail.
How to Lose Money with a Bitcoin Investment, Part 1: The Easy Money Mantra
Many investors holding Bitcoins naturally look for ways to put their money to work via investments that can generate capital growth, income, or both. Several worthwhile opportunities are available in the Bitcoin space, but one commonly mentioned trading method needs a crystal ball to work well.
Avoiding an Apple Overreaction
Investors who wrote the Apple puts I suggested in April can either lock in their gains now or await further gains at August expiry. The catch? Waiting for further gains introduces extra risk from the possibility of a market overreaction following earnings next week.
Winklevoss Bitcoin Trust May Become THE Price Discovery Mechanism for Bitcoin
Seemingly overlooked in the hoopla about the Winkelvoss twins filing to create a Bitcoin ETF is a simple fact: if approved, the trust may rapidly supplant Mt. Gox and other exchanges as the principal price discovery mechanism for the cryptocurrency.
In the Bitcoin Economy, Anonymity and Privacy are Not the Same Thing
One of the most frequently cited benefits of cryptocurrencies such as Bitcoin is the enhanced level of privacy which such currencies can provide. It’s easy to conflate privacy and anonymity, however, and ironically enough, preoccupation with anonymity risks both undermining privacy and impeding the wider acceptance of Bitcoins as a currency for conducting business.
Calendar Spreads as a Follow-Up Strategy for Longer Term Call Buys
One well researched investment strategy keeps a large chunk of capital in ultra-safe government debt and deploys the remainder — say, 10% over the course of a year — in call options. Calendar spreads can provide an attractive follow-up for this strategy, enabling an investor to exploit downturns like the recent June swoon.