In unpredictable markets, most investors struggle to balance risk and reward.
Traditional investment strategies often rely on market growth, leaving portfolios exposed when the tide turns. It is like walking a tightrope one wrong step, and your portfolio could take a hit.
It is time you turn market swings into gains with our newly launched d-options-style market – Polytrade Dibs. Dibs lets you lock in a price today to buy or sell later, so you can profit from market moves without the risk of liquidation.
We offer a range of Dibs, including:
- Short-Term Put and Call Options (Right to sell &/or buy): Ideal for quick plays in turbulent markets
- Long-Term Put and Call Options (Right to sell &/or buy): Designed for those looking to lock in strategies over a longer horizon, maximizing gains or securing downside protection
Let’s help you with an example to help you navigate through this.
In this example, both short-term put options and long-term call strategies will be utilized to create a balanced, profitable approach during market uncertainty.
Seeking more than just survival, think your goals are:
- Shielding your portfolio from downturns
- Capturing opportunities in both bullish and bearish markets
- Maintaining flexibility with a mix of short-term and long-term positions
The Strategy
Utilize Polytrade’s Dibs suite:
Balanced Exposure: By mixing short-term protection with long-term opportunity, you can build a strategy that allows gains in either scenario—whether the market tanked or surged.
7-Day Put Option: Positioned as a hedge against market drops, this option provides a protective floor. Unlike traditional put options, there are no liquidations, offering the comfort of holding through volatility without forced exits.
Long-Term Call Option: As markets show signs of potential recovery, you can simultaneously take a long-term call position, setting up for gains if the market bounces back.
The Execution
Day 1-3: Market jitters intensify. The 7-day put option begins showing promise, acting as a safety net while other investors scramble.
Day 4-5: A dip in the market triggers the put option, generating returns even as portfolios elsewhere take hits.
Day 6-7: As sentiment starts to recover, you can exit the put position and lean into the long-term call strategy.
Following Weeks: With markets stabilizing, the long-term call option will allow you to ride the upward momentum, converting a cautious hedge into a strong growth play.
Short-Term Gains
If you call Dibs on a 7-day put option with a strike price of $0.3, lot size of 3000 and during the 7-day period, the market price of the asset drops to $0.2.
Payoff Calculation:
The payoff for a put option = Max(Strike Price – Market Price, 0)
Payoff = Max(0.3 – 0.2, 0) = 0.1 per lot
Initial Investment: Let’s assume the premium paid for the put option was $90 per asset.
Net Profit:
Profit = Payoff – Premium = $300 – $90 = $210
Percentage Return:
Return = (Net Profit / Premium) x 100
% Return = ($210 / $90) x 100 = 233.33%
A clear 2.33x your initial premium investment.
Long-Term Gains
If you call Dibs on a 3-month call option with a strike price of $1.25, lot size 5000 and at the expiry, the market price of the asset rises to $1.50.
Payoff Calculation:
The payoff for a call option = Max(Market Price – Strike Price, 0)
Payoff = Max(1.50 – 1.25, 0) = 0.25 per lot
Initial Investment: Let’s assume the premium paid for the put option was $60 per asset.
Net Profit:
Profit = Payoff – Premium = $1250 – $60 = $1190
Percentage Return:
Return = (Net Profit / Premium) x 100
% Return = ($1190 / $60) x 100 = 1983.33%
The Results
Short-Term Gains: The 7-day put option delivered a quick 2.3x return (illustrative), offering immediate capital to reallocate.
Long-Term Strategy: The call option, held for a few more weeks, added an additional 19.8x growth (illustrative), maximizing market recovery benefits.
Portfolio Stability: The blended approach reduced volatility in overall returns, maintaining steady performance even as the broader market oscillated.
Why This Worked?
Polytrade Dibs offer flexibility and strategic depth:
- Short and Long-Term Options: Adapt quickly to market changes or lock in longer-term plays
- Call and Put Styles: Make gains in both rising and falling markets
- No Liquidations: Unlike traditional derivatives, your strategy is never cut short by market movements
Don’t just react to the market, position yourself to win.