The Fund's First Trade Is Complete

Today the first trade of our virtual fund was completed.

The fund bought a Bitcoin call option with a $79,500 strike and expiry on August 28. The bet was that the price would continue higher and finish above this level at settlement.

The official Deribit settlement price was $79,682.33. The fund was therefore right about the direction: Bitcoin did finish above the strike. But with options, getting the direction right is not enough. The move was too small. The payout after the settlement fee was $5,843.95, and the trade ended with a realised loss of $44,298.79.

This is approximately 0.44% of the fund capital. After settlement, the fund has $9,955,701.21 and no open positions.

The first conclusion is simple. In options, it is necessary to assess not only the direction of the move. You also need to get its magnitude and timing right, and understand whether the potential payout justifies the price of the position. Here the growth idea was partly realised, but the move was too weak for the option that was bought.

One trade proves and disproves nothing. The fund now has its first fully completed cycle: a decision, a position that was actually available in the market, expiry, and an exact financial result. The next step is to examine where the expectation differed from the actual market move and use that in future decisions.

The first result is negative. It is recorded honestly. We continue.