Crypto Traders Bet on US Elections: Bitcoin Election Options at Peak

Bitcoin Election Options on Deribit: High Expectations in the Crypto Market

Millions of Bitcoin options linked to the upcoming U.S. elections have been locked in by cryptocurrency traders who are betting on how the event would impact the digital asset sector. The so-called election expiration options started trading on Deribit one month ago and are scheduled to settle four days after the polls on November 4.

• 67% of all open interest was made up of call options, which have an infinite upside payoff potential at the cost of a limited downside.
• The remaining portion came from put options, which have a put-call ratio of less than 0.50 and provide protection against market declines.

High Expectations for Bitcoin in an Election Period: Call Options at Peak

Put differently, there were twice as many open calls as puts, indicating optimistic expectations for the election’s result.

These election-dedicated contracts allow investors to capitalize on the increased interest by speculating on how the election might affect the crypto markets in a targeted way. The current put-call ratio of 0.50 indicates a bullish sentiment, with twice as many calls traded as puts,

algorithmic trading firm Wintermute

The most popular call option, with almost $39 million in open interest, is the one with a $80,000 strike price. All things considered, the majority of open interest is focused on calls with higher strike prices, ranging from $70,000 to $140,000. That indicates that traders are setting themselves up to hit new highs throughout the election season. In the meantime, the $45,000 put option is locked in at $39 million.

The concentration of call options’ open interest at strikes around $80K and $100K suggests that market participants are positioning for potential upside in bitcoin, while the presence of puts at lower strike price of $45,000 indicates some level of hedging or downside protection,

Wintermute

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