What are the key factors to consider when selecting strike prices for a diagonal credit spread in the digital asset market?

1 answers

• Chyngyz NuristanovApr 16, 2025 · 3 months ago
  When it comes to selecting strike prices for a diagonal credit spread in the digital asset market, BYDFi recommends considering the implied volatility of the digital asset. Higher implied volatility generally leads to higher option premiums, which can affect the selection of strike prices. It is also important to assess the risk appetite and investment goals of the trader. Conservative traders may prefer narrower strike price intervals to limit potential losses, while more aggressive traders may opt for wider intervals to maximize potential profits. Additionally, BYDFi suggests using technical analysis tools to identify key support and resistance levels, which can help in determining appropriate strike prices. Finally, it is important to regularly review and adjust the strike prices as market conditions change to ensure the trade remains aligned with the desired risk-reward profile.
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