In recent years, cryptocurrency trading has become a popular investment option, with many investors trying to capitalize on the market’s volatility. One trader, in particular, managed to make a staggering $1.3 million from a single trade, a 100X return from Silvergate’s meltdown.
According to a thread by Unusual Whales on Twitter, the trader purchased put options on Silvergate Capital Corp, a firm that has been recently hit with troubles. (NYSE: SI), a cryptocurrency-friendly bank that provides services to several cryptocurrency exchanges. The put options were set to expire with a strike price of $150.
Silvergate Capital, $SI, fell 58% today.
Yesterday new traders opened up positions on $SI 10 P 3/3/2023, expiring in two days.
They slammed puts, 81% ask side and exited today (see volume img).
That trader returned ~10000% today from yesterday, turning $13000 into 1.3 million. pic.twitter.com/JsJj0HIei1
— unusual_whales (@unusual_whales) March 3, 2023
Silvergate a while ago announced that it had suffered a data breach, causing its share price to plummet. The trader, who had purchased the put options, saw the value of their investment skyrocket. The put options were worth $13 each when they were purchased, and their value soared to $1,300 each after the announcement, resulting in a 100X return.
The trader sold their options, making a profit of $1.3 million on a $13,000 investment. The success of this trade highlights the potential profitability of trading cryptocurrency-related stocks and the importance of keeping a close eye on market trends.
Breaches proving to be a bug
Unusual Whales also notes that this isn’t the first time that Silvergate has experienced a significant price drop due to a data breach. Not so long ago, the bank suffered a similar incident, causing its stock price to drop by nearly 20%.
This news also serves as a reminder of the importance of cybersecurity in the cryptocurrency industry. As the industry continues to grow, it is likely that we will see more instances of data breaches and cyberattacks. Companies that provide services to the industry, such as Silvergate, must take all necessary precautions to protect their customers’ data and assets.
In conclusion, the trader who made a 100X return from Silvergate’s meltdown demonstrates the potential profits of cryptocurrency-related stock trading. It also highlights the importance of keeping an eye on market trends and being prepared to act quickly when opportunities arise. Additionally, this incident serves as a reminder of the importance of cybersecurity in the cryptocurrency industry, and the need for companies to take all necessary precautions to protect their customers’ assets.