Bitcoin (BTC) and Ether (ETH) "could see upside volatility" as USD 15bln options are set to expiry on Friday, according to CoinDesk

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  Major Options Expiry: Crypto options exchange Deribit is set to settle massive bitcoin and ether options contracts on Friday, with USD 9.5bln in BTC and USD 5.7bln in ETH options set to expire, marking one of Deribit's largest expiries.


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  Impact on Bitcoin and Ether: Deribit’s CCO Luuk Strijers told CoinDesk the expiry could introduce bullish volatility for BTC and ETH due to a significant portion of options expected to expire in-the-money (ITM), potentially injecting upward pressure.


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  In-the-Money Details:
  
  
  • For Bitcoin, USD 3.9bln worth of options, or 41% of the quarterly open interest, are anticipated to expire ITM.
  
  
  • For Ether, 15% of its total quarterly open interest of USD 5.7bln is poised to expire ITM.
  
  
  
  


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  Max Pain Points: The maximum pain points for this expiry are identified at USD 50,000 for BTC and USD 2,600 for ETH - when option buyers stand to lose the most money. "The theory is that option sellers (writers), usually institutions or traders with ample capital supply, look to pin prices near the maximum pain point to inflict maximum loss on option buyers."


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  Dealer Hedging and Market Volatility: Dealer hedging around the USD 70,000 strike due to short gamma positions could heighten volatility. This forced hedging is expected to produce significant price movements around this level, leading to potential sharp fluctuations in BTC and ETH prices.

Via CoinDesk 

28 Mar 2024 - 06:50- - Source: CoinDesk