COIN bull put spread: credit, risk, strikes

You are still selling downside — just not all of it. The long $125 put cuts the tail off below that level, which is why this needs $698 of buying power instead of the $13,500 a cash-secured put would tie up.

Above $135 at August 28, 2026, both puts expire worthless and you keep the full $302. Below $125, you lose the maximum $698. Breakeven is $131.98.

Return on risk is 43% for 27 days — 585% annualized. That headline is the reason people prefer spreads to cash-secured puts, and the reason spreads blow up accounts: the same capital supports several times the notional risk.

The risk is leverage, not the structure. $698 per spread is small; the temptation to sell ten of them because the buying power allows it is how a 68%-win-rate trade produces a losing year.

Between the strikes the loss scales linearly, so most of the damage happens fast when COIN breaks $135. There is no assignment-and-hold escape hatch: the long put you own expires the same day.

The structural problem with short premium is not the loss rate, it is the loss SIZE. A long run of small wins funded by an occasional large loss looks like skill on a monthly statement and like variance on a five-year one.

The premium is the highest per dollar of spot on this list and the honest reason is that the risk does not stop when the closing bell rings. Bitcoin trades all weekend; Coinbase options do not. A short strike that was two standard deviations away on Friday afternoon can be through the money before Monday's open with no opportunity to manage in between. Defined risk is not a preference here, it is the only responsible construction.

COIN's Aug 28 strikes are $2.5 apart near the money (1.71% of spot). Coarse enough that the strike you want frequently does not exist, and the nearest rung is a different trade. 5.5k contracts of open interest on Aug 28 is thin, and a structure that needs four separate fills will pay for it. 27 strikes on that expiry — 33% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Workable around the money, genuinely thin in the wings. Price your condor width against the open interest, not the ladder.

Skew is inverted: the 25-delta CALL implies 1.7% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is flat inside 1.5% between the two captured expiries, so there is no calendar edge to harvest and no event visibly priced into one month over the other.

At 73% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $28.93 over 27 days — roughly −19.8% to +19.8%, or $117.33 to $175.19. The structure above sells the part of that distribution the market thinks it will not reach. Whether that is a good trade is entirely a question of whether 19.8% is too much or too little for COIN over 27 days — the delta table cannot answer that, and neither can we.

The mistake this name punishes hardest: Weekend gap risk. Every other name on this list stops moving at the close on Friday; the asset behind this one does not.