Cryptocurrency options traders are facing a huge expiration wave this week as billions of dollars worth of contracts expire on Friday.
$3.51 Billion Bitcoin and Ethereum Options Expire
According to Greeks.Live, a leading provider of crypto options trading tools, approximately 86,000 Bitcoin (BTC) options and 695,000 Ethereum (ETH) options are due to expire this week, with a combined nominal value of $3.51 billion.
The put/call ratio, which measures the number of put options (bullish forecasts) versus put options (bearish forecasts), was 0.38 for BTC and 0.49 for ETH; This means that most investors expect prices to rise or remain stable.
"Maximum Pain Point", the price level that will cause the most losses for option buyers and the most gains for options sellers, was recorded at $27,000 for BTC and $1,800 for ETH. The "Maximum Pain Point" often acts as a magnet for the market price, as options sellers try to push the price towards that point to minimize their payout.
The implied volatility (IV), which measures the expected price fluctuations of the underlying asset, is falling across all major maturities, indicating that traders are expecting less volatility in the near future. The ultra-short-term IV for both BTC and ETH is approaching the ultra-low 30%, which means investors expect very little action over the next few days.
Greeks.Live also revealed that the distribution of expiry options includes a large amount of buy positions and prices are currently close to the max pain point. This represents a huge win for options sellers this month, especially in the context of the current market downturn and lack of hot spots.
*Not investment advice.