How Will Expiry Markets Affect Today’s Huge $7.7B Crypto Options?

About 89,000 Bitcoin options contracts expire on Friday, September 27. These BTC derivatives have a theoretical value of around $5.8 billion.

Today’s options expiration is a large amount due to the end of the month and the end of the third quarter, so it could affect the spot markets, which have risen this week.

Expiration of encryption options

This week’s massive batch of Bitcoin options contracts has a put/call ratio of 0.64, meaning there are far more long contracts (calls) expiring than short contracts (puts). The peak pain point, or the price at which the most losses will occur, is $59,000, about $6,000 below current spot prices.

Open interest, or the value or number of open options contracts that have not yet expired, is still high at the $70,000 strike price with $872 million there. Additionally, there is an additional $910 million in OI at $90,000 and over $1 billion in OI at the $100,000 strike price, according to Deribit.

Crypto options tools provider Greeks Live commented that the asset class has rebounded strongly in the past three weeks, boosted by the Fed’s 50 basis point rate cut, “which has increased market confidence enormously.” He predicted a bullish fourth quarter, citing several tailwinds for crypto markets.

“The third quarter is coming to an end, and judging by previous years’ data, the fourth quarter is usually good, and with the US election and two rate cuts, there should be plenty of trading opportunities.”

The Greeks added that this quarterly delivery brings “a large number of shifting positions and margin release”, with implied volatility of all major terms at low levels.

“With the end of quarterly delivery, IV still has downward pressure, the last two weeks will be a good opportunity to expose the fourth quarter.”

27 sep Data of Options
89,000 BTC options are about to expire with a Put Call ratio of 0.64, a Maxpain point of $59,000 and a notional value of $5.8 billion.
718,000 ETH options are about to expire with a Put Call ratio of 0.47, a Maxpain point of $2500 and a notional value of $1.9… pic.twitter.com/JWD30gCE5w

— Greeks.live (@GreeksLive) September 27, 2024

Expiration of Ethereum Options

There are about 718,000 ETH options about to expire with a theoretical value of $1.9 billion. These derivatives have a put/call ratio of 0.47 and a maximum pain point of $2,500. This brings the total crypto options expiration event to $7.7 billion, the largest since late March.

Crypto markets have gained 1.4% on the day to reach $2.37 trillion in total capitalization, their highest level since early August.

Bitcoin topped $65,700 at a two-month high, but retreated to $65,300 during the Asian trading session on Friday morning. Ethereum failed to break the resistance above $2,650 and was also down marginally at the time of writing.

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