Finding a Lottery Ticket Trade
How to Structure Asymmetric Bets Without Blowing Up Your Portfolio
How to Structure Asymmetric Bets Without Blowing Up Your Portfolio
There’s a difference between gambling…
…and intentionally buying convexity.
Today I want to walk you through how we structured what I call a “lottery ticket trade” in Circle Internet (CRCL) — and why this type of trade should only represent a very small, fun, speculative slice of a portfolio.
The Macro Thesis: Stablecoins Aren’t Going Away
I’m bullish on stablecoins.
Companies like Circle and Tether are becoming financial infrastructure. Whether you love crypto or hate it, stablecoins are increasingly used for:
Cross-border payments
Settlement rails
Treasury management
DeFi liquidity
On/off ramps to traditional banking
In the U.S., our direct public equity exposure to this theme is limited.
After its IPO, Circle traded as high as $298.
Today it trades near $60.
That’s an 80%+ drawdown.
Is that a screaming buy?
Not necessarily.
But it may be fertile ground for asymmetric speculation.
The Goal: Buy Convexity, Not Hope
Instead of buying stock…
Instead of buying naked calls…
We structured a long call vertical:
Buy the 100 Call
Sell the 110 Call
Expiration: June 2026 (~114 DTE at entry)
This is the 100/110 long call vertical.
Let’s break down the logic.
What the Option Chain Told Us
Stock: ~$61
Implied Volatility: ~80%
From the option chain:
100 Call theoretical value ≈ 2.12
Market ask ≈ 2.20
Delta ≈ 0.18
That means:
👉 Roughly an 18% probability of finishing ITM
👉 Realistically closer to ~10–15% chance of full profit
This is NOT a high-probability trade.
This is not income.
This is not portfolio core exposure.
This is a tail bet.
How We Found the Best Convexity Strike
This wasn’t random.
We didn’t just “pick 100.”
We analyzed the option chain to find where convexity per dollar improved.
Let’s walk through the logic.
Step 2️⃣ — Evaluate Delta vs Cost
At the 100 strike:
Delta ≈ 0.18
Cost ≈ $2.20
Rough probability ITM ≈ 15–18%
This is where:
The option is cheap enough
But still has meaningful gamma acceleration if price trends
Further out (120+):
Delta collapses
Probability collapses
But premium doesn’t fall fast enough
That means you’re paying for very low probability.
Not efficient.
Step 3️⃣ — Look at Convexity Density
Convexity density = how much upside acceleration you get per dollar risked.
The 100 strike sits in a “gamma transition zone”:
Still close enough to accelerate if price trends
Cheap enough to create large payoff multiples
Not so far OTM that it becomes a pure lottery
Step 4️⃣ — Where to Sell Against It?
Once we chose the 100 call, we analyzed the slope of decay above it.
Premium drop:
100 → 105: -0.41
105 → 110: -0.28
110 → 115: -0.24
115 → 120: -0.17
Notice the compression.
The premium density is strongest between 100 and 110.
After 110, you give up large upside range for minimal credit.
That’s inefficient.
Why 100 / 110 Was Optimal
By selling the 110:
We removed a large portion of extrinsic cost
We kept a tight, high-efficiency payoff zone
We improved return on capital dramatically
We reduced IV crush exposure
Selling 120 or 130 would:
Barely reduce cost
Cap explosive upside
Reduce payoff efficiency
So the 100/110 was not random.
It was selected because:
That is where the convexity curve transitions from expensive probability to efficient asymmetry.
The Asymmetric Profile
Approximate structure:
Debit ≈ $0.70
Max profit ≈ $9.30
Max loss = $0.70
That’s 13:1 payoff potential.
Probability of success? Maybe ~10%.
And that’s fine.
Because this is not a core trade.
This is structured speculation.
The Bigger Lesson
The goal was not:
“Find the cheapest call.”
The goal was:
Find the strike where:
Premium decay slows
Gamma per dollar improves
Theoretical pricing aligns with market
Risk is defined
Upside multiple is extreme
That’s how you find a lottery ticket trade with structure.
The Math (Approximate)
Buy 100 Call ≈ 2.20
Sell 110 Call ≈ ~1.50
Estimated net debit ≈ $0.70
Max value at expiration = $10
Max profit ≈ $9.30
Max loss = $0.70
Breakeven ≈ 100.70
That’s over 13:1 payoff potential.
But…
Probability of max profit? Likely under 10%.
And we must assume:
There is a VERY large chance this expires worthless.
This Is the Point Most Investors Miss
A lottery ticket trade is acceptable IF:
Position size is tiny
You fully accept total loss
It does not affect core portfolio health
It fits within a broader disciplined framework
This is not a “conviction core allocation.”
This is:
Structured speculation on a stablecoin narrative resurgence.
What Needs to Happen for This to Work?
Circle would need:
A major regulatory catalyst
Stablecoin legislation clarity
Explosive adoption metrics
Or another crypto bull cycle
In other words:
A narrative shift.
This is a reflexivity trade.
What Will Likely Happen?
Statistically speaking?
It probably expires worthless.
And that’s fine.
Because it was sized accordingly.
The Real Lesson
The real lesson isn’t “buy CRCL.”
The lesson is:
If you’re going to speculate…
Do it in a defined-risk, convex way.
Not by:
Going all-in on stock
Buying high-IV naked calls
Or trading emotionally
Instead:
Structure it.
Control it.
Cap the damage.
Where This Fits in a Grow Your Pile Portfolio
Our framework prioritizes:
Income strategies (high probability)
Capital preservation
Strategic hedging
Small convex asymmetric bets
This is category #4.
Fun money.
Intellectual speculation.
A long-duration upside lottery ticket.
Final Thought
Most portfolios fail not because of one lottery ticket…
But because lottery tickets become position sizes that matter.
Never confuse entertainment capital with core capital.
This trade has a large probability of going to zero.
We are perfectly comfortable with that.
Because we sized it that way.
If you’d like to see how we structure trades like this inside our portfolios — including sizing discipline, delta limits, and asymmetric exposure — visit:
👉 www.GrowYourPile.com
Raise your financial IQ.
Trade with structure.
Speculate responsibly.
— Tony
Disclosure
The information provided in this article is for educational and informational purposes only. It is not investment advice, a recommendation, or an offer to buy or sell any securities.
All examples discussed, including the Circle (CRCL) 100/110 long call vertical, are used solely to illustrate options concepts such as convexity, probability, risk management, and structured speculation.
Options trading involves substantial risk and is not suitable for all investors. Long call spreads can result in a total loss of capital invested. The probability estimates referenced are theoretical and based on option pricing models, which may differ from actual outcomes.
Past performance is not indicative of future results. Market conditions, volatility, liquidity, and individual financial circumstances can materially affect outcomes.
Before making any investment decisions, you should conduct your own due diligence and consult with a qualified financial professional to determine whether a strategy is appropriate for your individual situation.
Grow Your Pile and its contributors make no representations or warranties regarding the accuracy, completeness, or profitability of any strategy discussed.
Trade with discipline. Manage risk appropriately.