Bitcoin and Ether prices are affected by the expiry of options

The Key Takeaways

• The expiry of options creates volatility, as traders look to lock in profits and cut losses while repositioning around BTC and ETH large contracts.

• Put-call ratios indicate sentiment. Above 1, it indicates a negative outlook while below 1, a positive one.

• Max Pain suggests that prices for expiry tend to be higher in areas where there are more worthless contracts.

Bitcoin) is a new concept to many people.BTCEtherETH) market prices can seem unpredictable. Look closer and you’ll see that the volatility is actually driven by options expirations.

Crypto markets are affected by ripples when these contracts expire. You’ll be able to predict when the market is more volatile by understanding this.

1. What is an option expiry in Bitcoin or Ether?

You must first understand what an option is. This is a simpler way to understand option expiries. complicated trading method than spot trading.

Option contracts give holders the option (but not the obligation) of buying or selling BTC or ETH before contract expiration at a fixed price.

As a contract nears expiry, the trading price of this option contract will change. The price increases as the contract nears its expiration. volatile.

The spot BTC/ETH market can be affected by large volumes of expiring options at a time when the asset price is likely to move sharply.

Option contracts can be divided into two different types

Call options grant the owner the right of purchase, while put options provide the option to sell a particular asset before the expiration date.

Balance between the two calls and puts They are a good indicator of market sentiment. These are essentially future predictions on the direction that prices may move. It can also influence the direction of prices if they are outweighed.

Contracts have an expiry and start date. strike price and a premium. These three factors directly affect profitability. They also provide a mathematical model that takes into account expiry-related changes in price.

Did you Know? BTC doesn’t follow a standard schedule like traditional markets. The expiration date can vary, and they may occur in multiple timeframes. Friday of every month at 08:00 UTC.

2. What impact does the expiration of options have on crypto-market volatility and prices?

Start with an example. The market could be affected by a tiny percentage of $5 billion of option contracts that expire at the same time.

Options traders need to be mindful of their responsibilities. You can also click here to find out more about Execute a contract. This means that the entire $5 billion of cryptocurrency wouldn’t necessarily be purchased or sold.

It is likely that you will see an increase in trading when there’s a big option expiry coming up. The market becomes more active as traders adjust their positions, resulting in a large increase in trading volume. This time period of concentrated trading magnifies price movements beyond the normal conditions.

If you analyze markets, it is easy to see that there’s a strong correlation between the expiration of option contracts and cryptocurrency price changes. You will notice significant price changes when it comes to BTC or ETH.

In June 2021 for example, over 4 billion dollars in BTC options and ETH were set to expire. On June 14, volatility index jumped by 5.78%, which was the biggest increase over the last five-year period.

BTC quarterly expiries have more of an impact than monthly ones. This pattern helps you identify the expiry dates that will cause volatility in your market and need to be watched.

Did you Know? Chicago Board Options Exchange opened in 1973 – decades before BTC.

3. Take hold of market psychology, put-call ratios, and the market’s psychological approach

As expiries near, traders’ trading volatility rises as they close their positions in order to secure profits or minimize losses. It creates a loop of feedback that causes further positions adjustments, amplifying volatility.

Put/call ratios

You can use the put-call rate to get an idea about which direction the market may move. These ratios are a good indicator of sentiment, which can give you hints about retail and institutional sentiment.

The ratio above one indicates more negative bets. While the ratio below 1 is more positive, it can indicate a potential price increase.

Max Pain Theory

The Max Pain Theory is similar to a tug-of-war in the option markets.

Option buyers want the stock to move their way. Option sellers are the exact opposite. Max pain is defined as the price that most options will expire worthless.

It is crucial to understand that large participants in the market and whales may try to influence the crypto price to the maximum pain level as the expiration date approaches.

This indicator shows short-term movements of prices, while also showing potential levels of support and resistance.

Reversal of the market

Smart traders will also take into account the expiration dates. Extreme put-call rates could be a sign of upcoming market volatility. When ratios reach historical highs or lows, this could indicate that assets are being oversold. It increases the likelihood of a reverse after expiry.

Did you Know? Deribit – the world’s biggest options exchange – processed BTC options contracts worth $14.6billion in August 2025. This is the largest single digital asset expiry contract ever recorded in 2025.

4. Actionable strategies to navigate options volatility

Options expiries have the potential to send ripples throughout BTC and ETH. The price of underlying assets can be directly affected by traders looking to reposition. What can you do to manage such events?

• Keep track of key metrics To get an early indication of direction and volatility, track open interest and put-call ratios.

• Position hedging: Options can be used to safeguard your positions in high-volatility expiration periods. The downside can be limited while the upside is retained. When prices change by 5% to 10% within hours, this could be crucial.

• Diversification: Spreading risk over multiple assets or timeframes is often advised. It will reduce the losses that are realized during events of expiry. A high concentration of assets in a single area over a relatively short time period could leave you vulnerable to large expiries.

• Considerations of time: By marking key dates, you can avoid loss and take advantage of volatile periods.

• You can use advanced tools to: Data analysis tools like CoinGlass or CME Group Calendars can provide insight into the options market. This real-time information can provide you with a competitive edge.

• Volume and liquidity You can manage your risk by understanding trading patterns and liquidity as the expiry date approaches. This will help you to determine when typically liquidity dries out.

This article contains no investment recommendations or advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.