A Big Bitcoin Options Expiry Event Awaits This Friday

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Friday is Bitcoin options expiration day, and today is a mammoth end-of-month and end-of-year event. With billions in BTC derivatives expiring today, crypto markets may have one final movement before the end of the year.

More than 178,000 Bitcoin options contracts are set to expire on December 29, according to Deribit. This is one of the largest batches of the year, dwarfing the previous week’s options expiry events. 

Bitcoin Options Expiry 

The notional value of today’s whopping batch of Bitcoin derivatives contracts is $7.6 billion on options market leader Deribit. However, there are more expiring on smaller options exchanges such as CME and OKX.

The put/call ratio for the big Deribit slice is 0.67, meaning there are around 50% more call (long) contracts expiring than puts (shorts). The max pain point is $43,000 though there is a lot of interest in the $50,000 strike price with 24,600 calls. 

Greeks Live commented on the big annual delivery day, stating that the total of $11 billion is up from last year’s end total position of $9.8 billion. 

“The market always goes into low volatility at the end of every year, but thanks to the ETFs expected next January, the current overall IV level is not too low.”

BTC options OI by expiry. Source: X/@GreeksLive
BTC options OI by expiry. Source: X/@GreeksLive

For the bears to get even, they need a lower price of $41,900, while the bulls will be happy with a gain above $44,000 on December 29. 

Read More: 9 Best AI Crypto Trading Bots to Maximize Your Profits 

The outlet added that crypto options and the derivatives market in general have become more mature this year.

More institutional investors are entering the market with a wider range of strategies and products, it added. 

Ethereum Contracts Expiry 

In addition to the big batch of Bitcoin options expiring today, 1.49 million Ethereum contacts will also expire. 

The notional value of these options is $3.47 billion, and the put/call ratio is 0.51. There is a max pain point of $1,900 for Ethereum derivatives. 

Spot markets are retreating during Friday morning trading in Asia, with a 1.9% total capitalization decline.

Bitcoin has dropped 1.3% in a fall to $42,634 at the time of writing, but it remains range-bound.

Meanwhile, Ethereum has shed 1.7%, cooling from its 2023 high on December 28 to trade at $2,349. 

Market volatility usually dips over the New Year period but could bubble up again in anticipation of early January ETF approvals. 

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