MARA for Bitcoin Exposure: Top Trade Q1 2022

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Digital assets have been one of the stories of 2021, but have been largely non-tradable outside of spot trading due to the size and lack of availability of options. / BTC bitcoin futures are trading at a notional value of 5 Bitcoins, while / MBT the micro-contract at 1 / 10th the size may be a bit too small, and neither has a large market. ‘liquid options.

MARA is a digital asset mining company with a sliding correlation to / BTC above 0.50 and as high as 0.80. For context, this is roughly the range of correlation between AAPL, the largest component weight of the SP500, and SPY the ETF SP500.

With a considerable tilt to the call option side in the option price and strongly asymmetric volatility in the short durations, MARA presents itself as an interesting long diagonal on the upside. If this continues until 2022, buying the call option of 40 deltas in the 40-70 day range and selling the call option of shorter duration of 20 deltas (15-30 DTE) should be a cheap long delta game with high positive gamma exposure and just enough. theta to compensate for short term downward movements.

MARA: / BTC Rollover Correlation

Source: tasty

— Written by Nick Battista, Host of LIVE Options Trading Concepts

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