ETH Options

Crypto Derivatives Surge, Bitcoin Options Open Interest Climbs to $9.6 Billion

19/01/2021 by Idelto Editor

Bitcoin options open interest has reached $9.6 billion according to derivatives market data as the metric is nearing the high captured on January 7, 2021. Moreover, the aggregate open interest in bitcoin futures is steadily nearing all-time highs.

While cryptocurrency spot markets have consolidated, bitcoin-based derivatives markets have seen continuous action. At the time of publication, both bitcoin futures and options open interest has been rising significantly.

For instance, researchers at skew.com recently tweeted that “bitcoin futures open interest [is] quickly bouncing back to a new all-time high.” Skew also added that CME Group was now the largest open interest “by some margin.” Data from exchanges dealing with bitcoin futures shows that open interest continues to climb.

Okex holds the reins as far as bitcoin futures open interest today, followed by the platforms CME and Binance. These three leading bitcoin derivatives markets are followed by Huobi, Bybit, FTX, Bitmex, Deribit, Bitfinex, Kraken, and Coinflex respectively.

In addition to bitcoin futures nearing all-time highs in terms of open interest, ethereum futures and options have seen increased demand as well as the crypto asset’s spot markets near all-time price highs as well. Skew analytics indicates total ETH options interest is around $1.7 billion with Deribit commanding $1.5 billion. Deribit’s ETH options open interest is followed by Okex ($153M), Bitc.com ($41M), and Huobi ($9.7M).

Alongside the desire for crypto futures, bitcoin options have increased substantially during the first month of 2021. The estimated notional value of all open bitcoin options positions is $9.6 billion with an expiry set for January 29, 2021.

The crypto exchange Deribit commands the lion’s share of BTC options with 84.37% ($8.1B) of open interest. Deribit is followed by derivatives platforms such as Okex ($511M), Bit.com ($470M), CME ($398M), Ledgerx ($176M), and Huobi ($9.4M).

The aggregate of open interest on bitcoin options has swelled progressively over the last six months. Data from Bybit’s 24-hour long/short ratio shows shorts are up 50.64% while longs are 49.36%.

BTC longs and shorts stemming from Bitfinex according to Tradingview data shows longs are increasing while BTC/USD shorts have remained low.

The increased demand for bitcoin-based derivatives, follows BTC’s lifetime all-time price high of $42,000 recorded only 12 days ago. At the time of publication, BTC/USD spot market prices are still down 11.8% since touching the $42k handle.

Meanwhile, with the 258,818 BTC in options open interest, 99,753 BTC or $3.7 billion is set to expire in ten days.

What do you think about the recent increase in open interest for bitcoin derivatives like futures and options? Let us know what you think about this subject in the comments section below.

The $750 Million Pre-Halloween Bitcoin Options Expiry Has Started to Spook Traders

28/10/2020 by Idelto Editor

Even though cryptocurrency traders have been exuberant over the price rise, a number of analysts are focused on the large bitcoin and ethereum options expiries set to end before Halloween. Data from Skew.com shows $750 million in Bitcoin options is set to expire and prices could get volatile.

The price of bitcoin (BTC) touched an all-time 2020 high at $13,490 on Tuesday across global exchanges. The price spiked when the news leaked about Southeast Asia’s largest bank DBS launching a digital asset exchange.

Despite the major price climb this month, bitcoin and ethereum markets are expected to be volatile at the end of the week, as a great number of options are set to expire on October 30. The professional data and analytics firm Skew.com discussed the situation on Twitter on October 25.

“60k [in] bitcoin options are expiring this week, $750mln+ notional,” Skew tweeted. The major expiry not only coincided with the price rise but also the 12th year anniversary of the Bitcoin white paper will be celebrated the very next day. In addition to Skew’s statistics, the exchange holding the most bitcoin and ethereum options contracts, Deribit, published an article about the “trading uncertainty” tethered to the expiry on October 30.

Deribit published a chart that shows the current term structure of Deribit BTC options. “Due to the time value of options, the term structure tends to be upward sloping,” the Deribit report notes.

“However, the humps demonstrate an expected sharp price movement in a particular period of time. Similar to the traditional markets, the BTC market has priced in potential volatility in the election week of October 30 until November 6. The increased volatility is expected to continue at least until the end of Q4,” the crypto derivatives exchange added.

According to Deribit’s crypto derivatives channel on Telegram, a recent signal on October 26, 2020, explained that there’s currently 61k BTC options set to expire on October 30 of which 40k is held at Deribit. Additionally, 190k ETH options ($76 million) will expire on the same day of which 164k is held at Deribit.

Deribit’s crypto derivatives signal channel poses the question further:

This month we have seen a significant flipping of the [one] month skew and Bitcoin testing yearly highs. The 30 Oct ’20 expiry comes just a few days before the eagerly watched US election. With over 7% of the expiry open interest fixated on the 13,000 strike, could any early unexpected US election news or movement in the partially correlated stock market trigger Bitcoin to cross the strike and trigger a run on volatility?

On Tuesday, Skew tweeted about Deribit’s October expiry and said that dealers are likely long. “On Deribit for October expiry, 12k, 12.5k, 13k, and 14k calls are all open for 2k+ bitcoin options,” the researchers tweeted. The largest strike is the 9k put with more than 5k options open. Judging by where the October vol is marked, sub 40, it’s likely dealers are long against overwriters.”

Of course, speculators have put a lot of weight into crypto futures and options markets and lots of times these secondary markets do nothing. For instance, traders and analysts often talk about CME gaps that never fill and big options expiries that are extremely boring. For instance, crypto traders expected lots of volatility after speculating on more than 87k worth of bitcoin options that expired on September 25.

Similarly to the upcoming pre-Halloween bitcoin and ethereum options expiry, data from Deribit had shown the exchange held 67k worth (77%) of the 87k September 25 contracts. That day historical BTC price statistics show bitcoin opened on the 25th at $10,248 and closed at a high of $10,771 later in the afternoon. Options markets had no effect on spot market prices going forward. Bitcoin markets did not end up being turbulent at all after the large expiry and ended up rising 24.4% since then.

What do you think about the $750M + bitcoin options expiry on October 30? Let us know what you think about this subject in the comments section below.

The post The $750 Million Pre-Halloween Bitcoin Options Expiry Has Started to Spook Traders appeared first on Bitcoin News.

Turbulent Crypto Markets Expected – 87K Worth of Bitcoin Options Set to Expire on Friday

21/09/2020 by Idelto Editor

Markets are expected to be volatile this week, as a great number of bitcoin and ethereum options are set to expire this Friday. Data shows more than 87,000 bitcoin options will expire and 77% of the action is held on the Deribit exchange.

U.S. stocks dropped hard on Monday, as the Dow Jones Industrial Average dropped more than 700 points during the stock market’s afternoon trading sessions.

Meanwhile, bitcoin (BTC) took a hit on spot markets dropping over 4% in value. A number of other cryptocurrencies like ethereum (ETH -8%) lost even bigger percentages on Monday. However, crypto analysts are eying this Friday’s crypto options expiries, as there’s a large number of derivatives contracts across Deribit, Okex, Ledgerx, CME Group, Huobi, Bakkt, and Bit.com that will expire.

Data from Deribit shows there are over 87,000 BTC options that are set to expire this Friday. The exchange also details that 67k worth of those options (77%) are held on Deribit. Moreover, 459k worth of ETH options are set to expire on the same day and 414k or 90% is also held on Deribit.

The other three competitors, that pale in comparison to Deribit’s numbers, include; CME Group, Okex, and Ledgerx respectively.

On Monday morning (ET), Deribit’s Head of Risk and Product, Shaun Fernando, spoke about BTC’s volatility and the coin’s price action this month. “In the month of September, we have seen the BTC price trading between USD $10k and $12k,” Fernando said.

“The 1 month ATM volatility hit a high of 70% before falling to its level of 46% and we have seen volatility in the skew.”

Fernando further added:

The Deribit Index is currently trading more than 2.5% below the settlement of nearly 4 hours ago which could suggest some interesting realised vs implied strategies. If the trend carries, expect a run on vol. If we bounce back, we could see some interesting moves around the 11k strike where over 10% of the Sep open interest is stacked.

The researchers from Skew.com spoke about the cryptocurrencies implied volatility as well on Twitter. “Some capitulation in bitcoin,” Skew wrote. Options market as trading remains rangebound, one-month implied vol

There’s been a number of occasions where crypto derivatives produced volatile crypto spot markets, while other times expiry dates can be lackluster.

What do you think about the number of BTC and ETH options that are set to expire on Friday? Let us know what you think in the comments section below.

The post Turbulent Crypto Markets Expected – 87K Worth of Bitcoin Options Set to Expire on Friday appeared first on Bitcoin News.