$2.7B worth of Bitcoin and Ether options set to expire soon
Crypto News– Around $2.7 billion worth of Bitcoin and Ether options are slated to expire on May 24, offering key insights into market sentiment. According to a post by Greeks.live on X, there are 21,000 Bitcoin options with a put/call ratio of 0.88, indicating a relatively balanced stance between buyers and sellers, albeit with a slight lean towards call options. The maximum pain point, where most option buyers would face losses, is identified at $67,000, totaling $1.4 billion.
May 24 Options Data
— Greeks.live (@GreeksLive) May 24, 2024
21,000 BTC options are about to expire with a Put Call Ratio of 0.88, Maxpain point of $67,000 and notional value of $1.4 billion.
350,000 ETH options are about to expire with a Put Call Ratio of 0.58, Maxpain point of $3,200 and notional value of $1.3… pic.twitter.com/rftA9kBm4q
While the impending expiry of 21,000 contracts is significant, it’s dwarfed by the mammoth event anticipated on May 31, with a whopping $4.3 billion in options set to expire, as per Deribit. Deribit’s data underscores that long positions hold sway in terms of open interest (OI), particularly with a hefty $830 million linked to the $70,000 strike price. Additionally, higher strike prices show substantial OI, notably $843 million at the $100,000 mark, signaling a bullish sentiment among traders. The $60,000 strike price stands out for put contracts, boasting $388 million in open interest.
Options Expiry Insights: Bitcoin and Ethereum Show Divergence in Market Sentiment
With a substantial Open Interest (OI), indicating many unsettled contracts, bulls are displaying confidence in significantly higher Bitcoin prices, as OI represents the unresolved value of contracts awaiting settlement.
Not limited to Bitcoin, the options expiry event encompasses a significant 350,000 Ether contracts, valued at $1.3 billion. A put/call ratio of 0.58 and a max pain point of $3,200 suggest a slightly bullish tone, with more call options expiring than put options.
According to Greeks.live’s report, Ethereum recently led the crypto rally, driven by ETF progress, experiencing a one-day surge of 20%. Short-term options implied volatility (IV) reached 150% at one point, surpassing Bitcoin’s current IV for the same period.
However, a clear divergence between Bitcoin and Ethereum is now apparent. While Ethereum maintains strong bullish sentiment, sustaining high IV levels for each major term poses challenges from the perspective of overall market trading and market structure.
FAQs
What are Bitcoin and Ether options?
Bitcoin and Ether options are financial derivatives that give the holder the right, but not the obligation, to buy or sell Bitcoin or Ether at a predetermined price (strike price) within a specified period (expiration date).
Why is the expiration of Bitcoin and Ether options significant?
The expiration of options can impact market sentiment and trading activity. It provides insights into the market’s expectations regarding the future price movements of Bitcoin and Ether, as well as the strategies of options traders.
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