Mathematician: Practice Question 2

You sold all of your BTC at an average price of 21500 USD and price has risen without you to the current price of 22832 (seen below). You then placed bids to fill all of your BTC at the price range between 20700 up to 21000.

To earn passive income, you also took the play below — where if price settles above 21000 by August 5th (in 6 days) then you would earn a 24.1% excess return on your capital (1% HXRO fee so a 1.251x payout is actually 1.241x).

When taking this play, what percent of your capital would you allocate to your spot bids vs for the HXRO passive income play?

  1. 10% in bids and 90% in the HXRO play
  2. 50% in bids and 50% in the HXRO play
  3. 90% in bids and 10% in the HXRO play