Hold onto your hats, crypto enthusiasts! A monumental crypto options expiry event is set to hit this Friday as we wrap up both the month and the quarter. And guess what? It's going to be a wild ride!
We're talking about a whopping 89,000 Bitcoin options contracts expiring on September 27. That's right, these BTC derivatives are worth a staggering $5.8 billion. With the end of the month and the quarter aligning, this could shake up the spot markets, which have been on a bullish streak this week.
This gargantuan batch of Bitcoin options has a put/call ratio of 0.64, indicating a lot more long (call) contracts than shorts (puts). The ‘max pain' point, where the most financial losses occur, sits at $59,000, a good $6,000 below the current spot prices.
Open interest (OI)—the value of open options contracts yet to expire—is still sky-high at the $70,000 strike price, with $872 million there. Plus, there's an additional $910 million in OI at $90,000 and over a billion dollars in OI at the $100,000 strike price.
Crypto options tooling provider Greeks Live chimed in, noting that the asset class has surged in the past three weeks, driven by a 50 basis point rate cut from the Fed. This has pumped up market confidence like never before. They're forecasting a bullish fourth quarter, thanks to several positive market forces.
“The end of the third quarter is here, and historically, the fourth quarter tends to be favorable. With the US election and two rate cuts, there should be plenty of trading opportunities,” Greeks Live said.
They also mentioned that this quarterly delivery will bring “a large number of shifting positions and margin release,” with implied volatility at low levels. “With quarterly delivery ending, IV still faces downward pressure, making the last two weeks an excellent opportunity to set up for the fourth quarter.”
Let's not forget about Ethereum! Around 718,000 ETH options are also set to expire, worth a cool $1.9 billion. These derivatives have a put/call ratio of 0.47 and a max pain point of $2,500. This brings the total crypto options expiry event to a jaw-dropping $7.7 billion, the biggest since March.
Crypto markets have gained 1.4% today, reaching a total capitalization of $2.37 trillion—its highest level since early August. Bitcoin hit a two-month high of $65,700 before slipping back to $65,300 during the Friday morning Asian trading session. Ethereum, meanwhile, couldn't break resistance above $2,650 and also took a slight dip.
So, buckle up! This Friday's options expiry could be a game-changer. Keep your eyes peeled and your wallets ready!
