10x Research Recommends Bitcoin ‘Short Strangle’ Again as Options Market Signals Calm

Bitcoin (BTC) has stayed rangebound through August, defying expectations for heightened volatility. With market dynamics suggesting stability will persist into September, 10x Research is once again highlighting the “short strangle” as the preferred strategy.

“Given current conditions in the bitcoin options market, a short strangle remains well-suited for the month ahead,” Markus Thielen, founder of 10x Research, wrote in a Thursday client note. “With bitcoin trading near $113,000 and an expected range between $95,000 and $125,000, selling an out-of-the-money September put around $95,000 alongside an out-of-the-money call near $125,000 offers a strong opportunity to capture premium.”

A short strangle involves selling both an OTM put and an OTM call with the same expiry, effectively selling volatility on both sides of the market. The maximum profit is capped at the combined premium received, provided the underlying trades within the defined range until expiration.

The approach works best when implied volatility (IV) is higher than realized volatility, allowing option sellers to benefit from inflated premiums. According to Thielen, bitcoin’s IV curve remains above realized levels, while the term structure points to near-term calm.

“Options are overpriced relative to realized volatility, and the market is unlikely to deliver outsized moves outside the $95,000–$125,000 range in the short run,” he said.

Risk-Reward Dynamics
For the trade to succeed, BTC must remain between $95,000 and $125,000. Rangebound trading would sap demand for both puts and calls, draining premium value and leaving sellers with profits.

Thielen’s August short strangle—structured with a $105,000 put and a $130,000 call—delivered a 3.5% yield, according to the firm.

Still, the strategy is not without risk. A sharp volatility spike could lead to outsized losses, meaning positions must be closely managed.

“The short strangle can be highly effective in stable conditions, but traders must remain vigilant, as unexpected price swings can quickly turn profitable setups into costly ones,” Thielen warned.