Bitcoin and ethereum optionality (part 2): listed pathways and risk-defined outcomes

Key takeaways

• This article is an educational implementation guide. It focuses on how investors can express crypto exposure using listed instruments and how options can shape outcomes with defined risk.
• ETFs/ETPs are often the cleanest “bridge” for many investors, but they are not the only listed pathway. Equity proxies (treasury-style crypto companies, miners, and infrastructure) can add different risk exposures.
• Options are not about predicting the next move. They are about being specific about the outcome you want: capped upside participation, defined downside protection, or a combination.

1) Who this is for

Part 1 outlined the macro backdrop, the recent drawdown, and the three signposts to monitor: rates, volatility, and flows. This follow-up shifts from orientation to implementation.

It is written for readers who want to express a bitcoin or ethereum view using listed instruments, while keeping risk boundaries explicit and measurable.

2) The listed exposure menu (practical pathways)

This article focuses on listed instruments, because they are accessible, familiar, and easier to risk-manage for many investors than holding coins directly. The cleanest “wrapper” exposure is typically an ETF/ETP, while equity proxies can add a different mix of risks and sensitivities.

2.1 Direct wrappers (closest to coin exposure)

For bitcoin, the most widely used listed wrapper in the U.S. is IBIT. For many european clients, a relevant line is IB1T (listed on the Paris Euronext exchange).

For ethereum, the U.S. wrapper is ETHA, while a european listed alternative is CETH (CoinShares Ethereum Staking ETN, listed on the Amsterdam Euronext exchange).

These wrappers are straightforward for expressing directional exposure, but they are not identical to the underlying coin. Crypto trades 24/7 while these instruments do not, so gaps can occur between sessions. Tracking differences, fees, and liquidity conditions also matter.

2.2 Other listed pathways (equity proxies)

ETFs/ETPs are not the only way to express a view on crypto-related themes. Some investors prefer equities around the ecosystem, but these are not interchangeable with holding bitcoin or ethereum directly.

• A first bucket is treasury / balance-sheet crypto companies, such as Strategy (MSTR), which is one of the biggest Bitcoin holders, and similar names such as BitMine Immersion Technologies Inc (BMNR), which holds the biggest Ethereum reserve. These names can amplify moves, but they introduce equity-specific risks such as financing and dilution dynamics, valuation swings, and company event risk.

• A second bucket is miners (e.g., MARA, CLSK, CIFR, IREN). These can behave like operational leverage to the bitcoin cycle, but they are sensitive to power costs, capex requirements, balance-sheet pressure, and regulation.

• A third bucket is market infrastructure (e.g., COIN), which can reflect trading activity and sentiment as much as coin prices, alongside regulation and competitive dynamics.

As a simple guardrail: because these are equities, they can move for reasons unrelated to coin prices, including earnings, regulation, and changes in funding conditions.

Saxo also maintains a crypto and blockchain theme that tracks a basket of related companies worth monitoring.
You can find it on: 

• SaxoTraderGO 
• SaxoInvestor

3) Options in outcomes language

Options are contracts that can reshape your payoff. For most investors, it helps to start with intent rather than jargon: what outcome are you trying to create?

One intent is defined-risk upside participation, where you accept that the option premium can be lost, in exchange for the possibility of capturing upside if the market rebounds. Another intent is downside protection, where you pay a premium to reduce tail risk if markets fall further. A third intent is income-style outcomes, where premium is collected in exchange for taking on risk or trading away some upside. A fourth, more advanced intent is range / uncertainty outcomes, which aim to benefit if realised moves end up smaller than what the market priced in.

Two practical notes matter in crypto. First, after sharp sell-offs, options often become more expensive because demand for protection rises. Second, “defined risk” is not automatic: it depends on the structure you choose.

4) Scenario-to-structure map

This section stays conceptual. It outlines families of structures that can fit each market regime. The worked examples and screenshots are shown later in section 9.

If the market stabilises and trades range-bound, investors often look at income-oriented structures. A short put (ideally cash-secured) is the simplest expression of that idea, while multi-leg variations such as iron condors or jade lizards can be used to express “range” views with different trade-offs. The common thread is that you are typically being paid to take on risk while hoping volatility does not re-accelerate.

If the market turns risk-on and rebounds, the cleanest defined-risk tool is a long call, especially longer-dated calls when the intention is to give the thesis time. A bull call spread is a common variation that reduces upfront cost in exchange for capping upside. More advanced approaches (such as synthetic stock concepts) can replicate directional exposure, but they require more comfort with assignment and margin.

If the weakness continues and downside pressure persists, protection and bearish expressions come to the foreground. A bear put spread is a common risk-defined template: it can reduce cost versus an outright long put, but it caps the benefit below the short strike. Variations include long puts (clean but potentially expensive after sell-offs) and bear call spreads (defined-risk premium collection, but exposed to sharp rebounds).

5) Choosing horizon and “how far out” (non-prescriptive)

A practical way to choose option horizon is to align it with the scenario horizon. If your thesis is about the next few weeks, very long-dated options may be unnecessarily expensive. If your thesis is about a multi-month rebuild, very short expiries can create avoidable timing pressure.

One important concept is time decay (often called theta). If you are buying premium (paying a debit to buy an option or a debit strategy), time decay typically works against you: all else equal, the option loses value as time passes. That is why many investors prefer to buy enough time. As a rough rule of thumb, if you expect a move over the coming week or month, choosing an expiry that sits a bit further out on the timeline (often at least one to two months ahead) can reduce the pressure from rapid time decay.

If you are selling premium (collecting a credit), time decay can work in your favour, but selling options too close to expiry can introduce another risk: gamma risk. Near expiry, option prices can change very quickly when the underlying moves around the strike, especially at-the-money.

A commonly used reference window for premium selling is 30 to 45 DTE, where DTE stands for days to expiry. This is not a law of nature, and many variations are possible, including very short-dated options when that fits a trader’s process. The practical message for investors is simply to be deliberate: when you buy premium, you usually want enough time; when you sell premium, you want time decay working for you without stepping into the most erratic part of the expiry curve.

Rather than anchoring on a specific price target, many investors use the market-priced move (often called an “expected move”) as a reference point to judge how much movement is already priced into the option premium. It is not a forecast, but it is a useful yardstick.

6) Volatility matters (the practical version)

Implied volatility is the market’s price tag on uncertainty. After sharp moves, that price tag often rises, because more investors want protection at the same time.

That does not mean “avoid options”. It means structure choice matters. Spreads can reduce cost, but they cap outcomes. Outright options can be clean and intuitive, but they can be expensive when fear is high.

7) Risk controls that matter more than cleverness

Crypto can move far and fast, so risk control usually matters more than finding the “perfect” structure.

A first practical point is position size. Options prices are usually shown as small numbers, but most listed equity and ETF option contracts represent 100 shares. That means you generally need to multiply the quoted option price by 100 and by the number of contracts to understand the true cash amount at risk or received. For example, a quoted premium of $1.09 is typically $109 per contract (before fees).

A second point is to define a personal risk budget. As a rule of thumb, many traders avoid positions where the maximum loss is more than roughly 2% to 3% of total account value. Think of it like a video game: you need enough “lives” left to keep playing. In practice, risk management often matters more than headline metrics such as maximum profit or probability of profit.

A third point is to avoid stacking exposure unintentionally. Holding a crypto ETF/ETP, adding proxy equities, and then adding options on top can create a concentrated bet that behaves badly in a stress event.

Finally, if margin is involved, treat it as a risk factor, not a footnote. If you intend to run margin-sensitive strategies, keep a large buffer and avoid operating near the limits of available margin. Using 70%–90% (or more) of available margin can leave little room for error, and a sharp move can force unwanted position reductions at the worst possible time.

It is hard to overstate this point: use margin sparingly. If you are new to options or leverage, staying on the safe side can be sensible. A conservative practice is to use no more than ~20% of available margin for an extended period (for example six months to a year) while you learn how positions behave through different market conditions. The goal is to build experience before taking on leverage levels that can trigger margin calls during sudden moves.

8) Monitoring checklist (repeatable)

A simple monitoring routine keeps implementation aligned with the thesis introduced in Part 1.

Revisit the macro and rates narrative. Check whether broader risk mood is calming or tightening. Watch whether ETF flows and positioning look constructive or defensive. Note whether implied volatility is expanding or compressing.

If two or three of those inputs shift against the original scenario, it is often a signal to reassess the structure rather than rely on hope. The same three signposts that frame the market should also guide adjustments to positions.

9) Worked examples (illustrative, based on platform snapshots)

To keep this practical, the three scenarios above are paired with concrete examples from the attached screenshots. These examples are purely educational and not recommendations.

Important note: the strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.

9.1 IBIT chart context