As $17B in Bitcoin, Ethereum Options expire this Friday, the crypto market is bracing itself for massive volatility.
The following is a summary of the information that you will find on this page.
- Bitcoin and Ethereum Options Contracts worth $17 Billion Expire Friday
- Out-of the-money options account for 82.5% open interest.
- Major macro events could cause volatility to increase if timing overlaps.
Crypto markets prepare for major event that could cause volatility. The Deribit crypto derivatives platform will expire over $17 Billion worth of Bitcoin and Ethereum option contracts on Friday October 31.
Bitcoin (BTC), 72,716 BTC call option contracts and 54,945 BTC put option contracts, worth a total of $14.4 billion, will expire on Friday. On the other hand, $2.6 billion in Ethereum (ETH) The expiration date of the options is set for that day.
Calls dominate puts and traders bet that BTC will rise before expiration. For Bitcoin, it is worth noting that the pain threshold is $114,000 – the point at which most options are rendered useless. It is important to note that market makers may hedge by bringing the price up toward this threshold, particularly near expiration.
There is a preference among traders for speculation. Options contracts that are out of money account for 82.5%. This means traders have not hedged their positions. These are not options, but bets made on the price of BTC and ETH in the future.
Bitcoin and Ethereum Options Expiration Could Trigger Volatility
Option expiration events increase the volatility of the market. As traders unwind positions and rebalance portfolios, they can cause large moves in the spot market. The effect can be even more pronounced when there are a lot of options that have been priced out-of the money.
This event coincides also with other major macro-events, such as the FOMC’s interest rate announcement and earnings of major companies. These events may increase short-term market volatility.
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Source: crypto.news
