Bitcoin and Ether prices are affected by the expiry of options

What you need to know:

• Option expiry causes volatility because traders are forced to cut their losses, lock up profits and reposition themselves around BTC or ETH contracts.

• Put-call ratios indicate sentiment. Above 1, it indicates a negative outlook while below 1 shows bullish expectations.

• 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.

The crypto market is affected when large numbers of derivative option contracts are approaching their expiration date. Understanding this will help you to know when price movements are likely.

1. What are the options expirations in Bitcoin and 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.

The price that a contract can be traded at will increase as it approaches its expiration. 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 the same moment. Prices for the underlying assets may 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 the 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. If one is more important than the other, this can have a direct influence on price pressure.

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 a simple example. The market could be affected by a fraction of $5 billion of option contracts that expire at the same time.

Options traders need to be mindful of their responsibilities. The following are alternatives to the 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 more trading activity when an option with a significant expiry date approaches. This increases market activity, as traders move positions and create a spike in volume. This time period of concentrated trading magnifies price movements beyond the normal conditions.

You can clearly see the correlation when analyzing market data between expirations of options and fluctuations in crypto prices. With BTC and ETH you can see significant market price fluctuations.

If you take a look at the BTC index volatility, in 2021, over $4 billion worth of BTC and ETH option contracts will expire. On June 14, volatility index jumped by 5.80%, which was the highest in five years.

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) as the first global options exchange.

3. Take hold of market psychology, put-call ratios, and the ability to make a decision.

As expiries near, traders’ trading volatility rises as they close their positions in order to secure profits or minimize losses. It creates an endless feedback loop which triggers more position changes and intensifies volatility.

Put/call ratios

Put-call ratios can help you get a more accurate idea of the direction in which the market will move. The put-call ratios can be used as a sentiment indicator to get a better idea of 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

In the markets for options, Max Pain theory can be compared to a tug of warfare.

Option buyers want the stock to move their way. The opposite is true for option sellers. 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.

The indicator indicates short-term changes in price while locating possible support and opposition levels.

Reversal of the market

Smart traders may also consider dates beyond expiration. Put-call ratios that are extreme could indicate a possible market turn around. When ratios reach historical highs or lows, this could indicate that assets are being oversold. The likelihood of an expiry reversal increases.

Did you Know? Deribit, the world’s largest option exchange, has processed contracts for BTC expirys and ETH contract terminations worth $14.6 Billion in August 2025. This is the largest single digital asset expiry contract ever recorded in 2025.

4. You can use these strategies to navigate options volatility.

The BTC/ETH market can be affected by the expiration of options. The price of the asset can be directly affected by traders looking to reposition. What can you do to manage such events?

• Watch 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 expiry periods. The downside can be limited while the upside is retained. It is important to consider this when the price moves 5% or more in an hour.

• Diversification: Spreading risk over multiple assets or timeframes is often advised. The losses will be minimized during the expiry event. You can be exposed to significant expiries if you have a high single-asset concentration in a short amount of time.

• Considerations of time: You can prepare for volatile times by marking important dates.

• Advanced Tools: Data analysis tools like CoinGlass or CME Group Calendars can provide insight into the options market. Real-time data gives you an edge on simple spot traders.

• Volume and liquidity As expiry draws near, managing risk can be easier if you understand trading volume and liquidity patterns. You’ll be able to see when the liquidity usually dries.

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.