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Traders Play The Bitcoin Bull Move Using Marathon Digital Options

May 5, 2021 4:16 pm
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Traders Play The Bitcoin Bull Move Using Marathon Digital Options

For those who want exposure to the cryptocurrency space using their regular broker, buying shares or options of a Bitcoin (CRYPTO: BTC) miner such as Marathon Digital Holdings Inc (NASDAQ:MARA) is an option.

Marathon Digital mines its own bitcoin to acquire it at a lower cost. This gives shareholders more protection against the cryptocurrency’s wild fluctuations and helps protect Marathon Digital’s bottom line.

On Wednesday, Bitcoin rebounded 8% by midafternoon and a number of options traders bet $541,440 Bitcoin’s rise will have a positive effect on Marathon Digital’s stock.

Related Link: How to Buy Bitcoin (BTC)

The Marathon Digital Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

  • At 10:04 a.m., a trader executed a call sweep, at the ask, of 444 Marathon Digital options with a $32 strike price expiring on May 28. The trade represented a $226,440 bullish bet for which the trader paid $5.10 per option contract.
  • At 11:15 a.m., a trader executed a call sweep, at the ask, of 250 Marathon Digital options with a $40 strike price expiring on Sept. 17. The trade represented a $239,000 bullish bet for which the trader paid $9.56 per option contract.
  • At 12:06 p.m., a trader executed a call sweep, at the ask, of 200 Marathon Digital options with a $34 strike price expiring on May 14. The trade represented a $76,000 bullish bet for which the trader paid $3.80 per option contract.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

MARA Price Action: Shares of Marathon Digital closed down 1.1% to $33.55

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