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Today, more than $10 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire.
Market observers are paying special attention to this event due to its potential to influence short-term trends through contract volume and their notional value. Looking at option ratios and maximum pain points can provide insight into a trader’s expectations and the likely direction of the market.
Bitcoin and Ethereum Options Expire Today
The notional value of BTC options expiring today reached $9.47 billion. According to data from Deribit, 98,309 Bitcoin options set to expire have a call-to-sell ratio of 0.84. This ratio shows the superiority of call options over put options.
The data also reveals that the maximum pain point for these expiring options is $80,000. In cryptocurrency options trading, the maximum pain point is the price at which most contracts will expire worthless. Here, property will cause the greatest financial loss for many Holders.
Besides Bitcoin options, 412,116 Ethereum options contracts will also expire today. The nominal value of these options reaches 1.47 billion USD with a call – put ratio of 0.75. The maximum pain point is 2,900 USD.
The current market prices of Bitcoin and Ethereum are above their respective maximum pain points. BTC trades at $96,353 while ETH is at $3,573. This shows that if the option expires at these levels, it will signal a loss for the option holder.
Results for options traders can vary significantly depending on the specific outstanding price and the position they are holding. To accurately assess profit or loss at expiration, traders need to consider both the complete options position and current market conditions.
Information About BTC and ETH Options Expiring Today
Analysts at options trading tool Greeks.live reveal an interesting insight from investors, suggesting that a comprehensive assessment is necessary before drawing conclusions.
“We had an 11% drop on BTC and many said the end was near. Less than 10 days ago, these people were asking for a sale to buy,” they write.
Jeff Liang, CEO and co-founder of Greeks.live expressed optimism, saying he is willing to hold until options expire at 8:00 UTC, Friday.
“While the spread is significant, the implied volatility from the offering is on par with recent 1-month historical volatility, so is not overpriced. A 5% increase in market price could cover the difference. I’m ready to hold until expiration. I bought a bunch of calls last night, and the market made some moves this morning,” Liang speak.
Meanwhile, the Cryptocurrency market still shows mild optimism. In a statement shared with TinTucBitcoin, Bybit said the optimism may stem from the expectations of investors hoping for a more crypto-friendly SEC Chairman following the resignation of Gary Gensler.
On this basis, Bybit also commented on the current market outlook, citing a Bitcoin price correction and that expiring ETH options signal a moderated bullish sentiment.
“BTC’s decline from the $100,000 mark has flattened the ATM volatility term structure, with short-term options falling below 60%. This reflects a pattern seen since the US election. Lower realized volatility explains the decline. While Open Interest in long and short options remained unchanged, demand for short-term options this week stagnated. ETH options show slightly more bullish sentiment than BTC options. Markets have corrected after post-election highs, but call options still lead in both trading volume and Open Interest,” Bybit add.
ATM IV refers to the implied volatility of an options contract whose outstanding price is equal to the current market price of the underlying asset. Analysts and traders often use this type of implied volatility to gauge market sentiment and expectations about the underlying asset’s movements.
Therefore, traders are advised to exercise caution, as history shows that options expiration often leads to short-term instability in the market. The weekend will be crucial as there is often high volatility due to low trading volumes.
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