Can $2.5B Crypto Options Expiration Add To Market Momentum?

About 32,000 Bitcoin options contracts with a notional value of about $1.9 billion expire on Friday, August 9.

Today’s options expiration event is slightly smaller than last week’s, so its impact on spot markets is likely to be limited.

Expiration of encryption options

This week’s big batch of Bitcoin options has a put/call ratio of 0.71, meaning more calls (longs) than puts (shorts) are expiring. The maximum pain, or the point where the most losses will occur, is $60,000, which is just below current spot prices after today’s rally.

According to Deribit, there is still plenty of open interest (OI) or contracts to expire, at strike prices of $65,000, $70,000, and $75,000.

Crypto derivatives provider Greeks Live commented that sentiment in the crypto market has returned following a softer stance by Japan’s central bank.

He added that implied volatility (IV) at the major term has come down, but is still higher than before the crash, “and with the strong volatility, it is difficult for IVs to fall sharply over a short period of time.”

August 9 Options Data
32,000 BTC options are about to expire with a Put Call ratio of 0.71, a Maxpain point of $60,000 and a notional value of $1.9 billion.
206,000 ETH options are about to expire with a Put Call ratio of 0.96, a Maxpain point of $2,950 and a notional value of $560… pic.twitter.com/soKryrB4Hw

— Greeks.live (@GreeksLive) August 9, 2024

In addition to current Bitcoin options, there are 206,000 Ethereum options about to expire. These have a notional value of $560 million, a put/call ratio of 0.96 and a maximum pain point of $2,950, which is well above current spot prices. This brings the total crypto options expiring to $2.5 billion in notional value.

Crypto markets rallied strongly on Thursday and in the Asian trading session on Friday, with total market capitalization reaching $2.23 trillion. They were mainly led by strong moves in BTC, which rallied after a death cross, and ETH, after a drop in retail buying.

Other options News

In other crypto options news, the CBOE has submitted a proposed strengthened rule change for options on Bitcoin ETFs at the moment. The CBOE, Nasdaq, and NYSE American applied for spot BTC ETF options in January, but the SEC suspended them in March and April.

On August 9, Bloomberg ETF analyst James Seyffart commented that the latest recharge could suggest that there has been feedback from the SEC.

Meanwhile, on August 7, Grayscale, Bitwise, and NYSE American filed with the SEC a rule change for the options listing of three spot Ether ETFs. Options provide more flexibility than futures as they give traders the option to sell contracts at a specific price or set date.

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