Opportunity or Risk? Expiration of $640 million in Bitcoin options

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This Friday, October 13, some 24,000 Bitcoin options contracts are about to expire, with a value close to $640 million, generating some rumors in the market regarding how these types of impacts are being diluted lately by the leading asset of the crypto ecosystem in recent times.

Although the general cryptocurrency market has been under pressure this week, with leading companies taking defensive positions, high inflation data in the United States and from war confrontations in the Middle East to several active lawsuits associated with exchanges linked to the crypto economy, it is worth questioning.

What role will the options expiration event play in the current situation?

This options expiration event is particularly significant as it represents 50% more options compared to last week’s expiration.

The “max-pain” point for these Bitcoin options remains at $27,000, the same as the previous week, although slightly above current spot prices, which are around $26,830 at the time of writing.

Bitcoin $640 million in options

The maximum pain point is crucial as it is where the majority of open contracts are concentrated and is therefore the level where the largest losses occur when contracts expire.

The current put/call ratio for Bitcoin options is 1.23, suggesting that there are more sellers of short contracts than buyers of long contracts, raising questions about the direction of the market.

Despite some uncertainty flying in the air, Bitcoin continues to lead the market with a 70% increase in weekly BTC options positions during this ending week. However, an unusual fact is observed: Bitcoin sale positions, at this expiration, represent 60% of the total, a phenomenon that has caught the attention of analysts.

To accurately measure phenomena of these characteristics and be able to concretely understand how maturities and important events have recently impacted our leading asset, we will review official extracts provided by TheBlock, looking at the Implied At-the-Money Volatility, which works as “A market forecast for a likely price movement” in this case, specifically for BTC.

Implied volatility (IV) represents the anticipated volatility of the underlying asset based on options futures prices, and it remains at historical lows in all main terms.

Greeks.Live analyzed in X this event after mentioning the options expiration for this Friday the 13th, as a particular detail that is currently happening in Bitcoin.

Also comments that 190,000 ETH options are about to expire with a Put Call Ratio of 0.71, a maximum pain of $1,600, and a notional value of $290 million.

Reviewing this data and analysis, it is considered unlikely that the expiration of options will substantially shake the spot markets this Friday, October 13 and that both the events or combination of events around the market and the world economy will increasingly affect less at the price of BTC, indicating a maturity and independence of the digital asset and increasingly affirming its position.

The total capitalization of the crypto market remains at $1.05 billion according to CoinMarketCap, with little movement in the last 24 hours.


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