Markets
$1.8 Billion in Bitcoin, Ethereum Options Expire as Market Watches
About $1.79 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire today, leading to an anticipated market rally volatility.
Traders are watching this event closely, especially with the upcoming launch of Ethereum spot exchange-traded funds (ETFs).
Traders anticipate higher volatility as options expire, Ethereum ETF buzz
According to data from Deribit, 20,679 Bitcoin contracts, worth about $1.31 billion, are set to expire today. This tranche is slightly lower than last week’s figureswhich were 23,832 contracts. These expiring contracts have a put/call ratio of 1.19, with a maximum pain point of $62,000.
Learn more: Introduction to Crypto Options Trading
Bitcoin options expired. Source: Derivative
The maximum pain point in the crypto options market represents the price level that inflicts the most financial discomfort on option holders. At the same time, the put/call ratio suggests a prevalence of call options over put options.
In addition to Bitcoin options, 142,583 Ethereum contracts will expire today, with a notional value of over $483.84 million. The put/call ratio is 0.37, with a maximum pain point of $3,150.
Deribit analysts provided an overview of the options market this week. They noted that Kraken Repays Note to Mt Gox Creditors appears to have prompted one fund to move its 85,000 December calls to a 65,000 August straddle to play gamma both ways.
Gamma in crypto options trading refers to the rate of change in an option’s delta in proportion to a $1.00 price movement in the underlying asset. It represents the extent of price exposure risk in an option position.
“Spot after an initial sale at 63,000, rose and forced short covering of calls, Delta and [implied volatility] IV. It is no coincidence that $4.5 million was unlocked from a sale of 85,000 call options in December and that exact amount was invested in the August 65,000 straddle,” they said. wrote.
They also highlighted similar transactions, including the purchase of 70,000 August calls funded by 90,000 December calls.
“This influx of bonuses was a combination of underperformance [fear of missing out] FOMO, short coverage and new exposure after German government coins are sold out and the market has climbed well beyond many expectations above $66,000,” Deribit said added.
Furthermore, Deribit stressed that Ethereum ETF spot trading indication on July 23 spurred a sharp rise in ETH. However, the gap between BTC and ETH narrowed from 15% to 8%.
Market analysts have noticed a trend since last week. report by BlockScholes and Bybit noted that as of last week, the anticipation of these ETFs This may have influenced the behavior of ETH derivatives, making it different from that of BTC. Additionally, BlockScholes’ Senti-Meter index, which measures investors’ risk preferences based on fund rates, yields, and volatility, indicates that investors have a more positive view of ETH than BTC.
Learn more: 9 Best Crypto Options Trading Platforms
Historically, options expiration tends to cause abrupt and temporary price movements. The market usually stabilizes shortly afterward. However, traders must remain cautious in analyzing technical indicators and market sentiment to effectively manage potential volatility.
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