Breaking Crypto News – Will $2.2B Crypto Options Expiry Lead to Increased Volatility in Cryptocurrency Markets?
Breaking Crypto News – On June 7, contracts for crypto options with a notional value of about $2.25 billion will expire. Among them are about 18,000 Bitcoin options contracts with a $1.25 billion notional value. The impact on spot markets is probably going to be minor because today’s crypto options expiry event is far less than the end-of-month contract expiry last week. With around a third more long contracts expiring than short ones, the put/call ratio of the current batch of Bitcoin contracts is 0.67. Additionally, $70,000 is the maximum pain point, or the price at which the majority of losses will occur.
Greeks Live Says Optimistic Sentiment Dominates the Market
Deribit claims that at the $75,000 strike price, there are about a billion dollars in open interest (OI). With OI at $890 million and $969 million, respectively, bullish options traders are now targeting $100,000 and $80,000 strike prices.
There is a “more optimistic market atmosphere as macro and news diverge significantly,” according to crypto derivatives tooling provider Greeks Live, with the Bank of Canada and the European Central Bank starting interest rate cuts this week and the market performing better due to both BTC and ETH ETFs. It also stated that “both of which have fallen to a reasonable level,” with the major term implied volatility for Bitcoin being roughly 50% and Ethereum being about 55%.
FAQ
What is Meant by Notional Value?
The total quantity of the underlying asset in a security at its spot price is its notional value. The amount of money invested and the total amount of money related to the transaction are distinguished by the notional value. The units in a single contract are multiplied by the spot price to determine the notional value.
What Time do Crypto Options Expire?
On the final Friday of the contract month, options on Bitcoin futures expire on the same day as the underlying Bitcoin futures contract. The futures contract that is delivered by the options expires instantly in cash.
What is the Put/Call Ratio?
The number of traded put options divided by the number of traded call options yields the put-call ratio. When the put-call ratio is 1, it means that there are exactly as many call buyers as there are put buyers.
What are Bitcoin Options?
Options on Bitcoin are financial derivatives contracts that let you buy or sell the cryptocurrency at a fixed price at a future date. Although they are usually less liquid, trading Bitcoin and other cryptocurrency options functions similarly to trading other types of options.
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