Petro-Lwa Strategy II · User Manual

The OTM Strangle Ambush

Cheap volatility · Wide breakevens · Squeeze breakout

What is this strategy?

A Strangle is the cheaper cousin of the straddle. Instead of buying a call and a put at the same strike, you buy them out of the money — the call sits 10-15% above spot, the put sits 10-15% below. Each option is cheaper because it needs a bigger move to pay out. You lose only the (smaller) total premium if price stays inside the band; you profit if BTC or ETH does what crypto often does — moves 20-40% in a month. Petro-Lwa arms this when the asset has been tightening and option premiums are still cheap, ambushing the inevitable break.

When does it trigger?

The Pine indicator PETRO-LWA-II.pine fires when both of these are true on the closed bar:

SignalDefault
IV Rank (30-day realized vol vs. 252-bar window)< 40
Bollinger-Band-width squeeze (width < avg × 0.7)true

Translation: vol is cheap and the chart is coiled. Pay a small premium, wait for the kicker.

1

Download the Pine script

Click below to download PETRO-LWA-II.pine.

⬇ Download PETRO-LWA-II.pine
2

Install on TradingView

Open BTC/USD or ETH/USD. Click Pine Editor, paste the script in, hit Save, then Add to chart.

▼ Pine Editor TradingView //@version=6 indicator("PETRO-LWA II · Strangle") iv_rank < 40 squeeze = bb_width < avg * 0.7 setup = iv_low and squeeze label.new("🟣 II · STRANGLE") [Save] [Add to chart] CHART · BTCUSD 🟣 STRANGLE + ADD TO CHART
3

Read the chart label

A small purple label drops under the candle with the IV rank value in plain numerals — confirming the market is coiled and cheap.

🟣 II · STRANGLE IV 22 · squeezed cheap calls + puts · ambush the breakout BTC/USD · 1D
4

Set up the alert

Right-click the indicator → Add alert → condition “PETRO II · Strangle Setup” → paste your bridge URL in Webhook.

Create Alert CONDITION PETRO·II ▸ PETRO II · Strangle Setup ▸ Once Per Bar Close WEBHOOK URL https://lasiren-bridge.cryptolwa.app/alert MESSAGE {{ticker}} strangle ambush iv {{plot}} CREATE
5

Execute the options trade on Deribit

Pick an expiry 60-90 days out. Buy one OTM call roughly +10-15% above spot AND one OTM put roughly -10-15% below. Target a combined premium near 5% of spot. Take profit fast on the first major move; never hold strangles inside the last two weeks of life.

DERIBIT · BTC-OPTIONS · 60-90 DTE SPOT: $100,000 · pay ~5% premium total CALLS (OTM) PUTS (OTM) STRIKE — ATM —100k— ATM — ▶ BUY CALL · 1,600 115k +15% (call wing) (put wing) 85k -15% BUY PUT · 1,800 ◀ TOTAL PREMIUM ≈ 3,400 USD · ~3.4% of spot · break-even ±18% Max loss = premium paid · Max reward = unlimited either side

Risk profile

Max LossTotal Premium Paid
Max RewardUnlimited Either Way
Best MarketSqueezed · Low IV

When NOT to use this

  • Strong directional trend already in motion — pick the side, don't buy both wings.
  • IV Rank above 60 — premium is rich; you would be paying for the move that already happened.
  • Inside two weeks of expiry — gamma is high but theta is brutal; the time decay eats the wings.

Plain-English glossary

OTM"Out of the money" — strike is past the current price (above for calls, below for puts).
StrangleLong call + long put at different OTM strikes. Cheaper than a straddle, needs a bigger move.
IV RankToday's volatility as a 0-100 percentile vs. the past year. Low = options cheap.
BB WidthDistance between the upper and lower Bollinger Bands. Narrow = coiled.
PremiumThe cash cost of an option contract.
BreakevenThe price the asset must reach for the trade to recover its premium.
DTEDays to expiry — option clock countdown.
ThetaDaily decay cost on a long option position.