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Billions of Dollars Worth of BTC and ETH Options Heading for Expiry

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Fri, 3/05/2024 - 8:27
Billions of Dollars Worth of BTC and ETH Options Heading for Expiry
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According to data provided by Greeks.live, 23,000 BTC options are close to expiring with a put-call ratio of 0.49. Their notional value stands at $1.4 billion. 

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The "max pain" point for Bitcoin options is estimated to be around $61,000. This means that this specific strike price has the biggest number of puts and calls. To put it simply, market participants on both sides of the trade would face the biggest losses at the aforementioned price level. 

The "maximum pain" suggests that the price of an option tends to move closer to the price point with the most open options contracts. In such a case, the maximum number of puts and calls expire worthless. It is worth noting only a small number of options (roughly 10%) tend to be exercised. 

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In addition, 330,000 ETH options are set to expire with a put-call ratio of 0.36. The "max pain" point currently stands at $3,000 with a notional value of $1 billion. 

As noted by Greeks.live, the market turned bearish due to massive Bitcoin exchange-traded fund outflows. Newly launched Hong Kong-based ETFs failed to offset these massive outflows. Due to these factors, the implied volatility (IV) of all major terms continued to decline. In fact, the IV level is now on par with the winter bull market.  

According to CoinGlass, the total Bitcoin options interest stands at $17.6 billion, with Deribit accounting for the vast majority of the sum. As for Ethereum, the total options interest is at $7.6 billion.        

Bitcoin and Ethereum are currently trading at $59,199 and $2,969, respectively, according to CoinGecko. 

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