Starting To Spook Traders Is The $750 Million Pre-Halloween Bitcoin Options Expiry 

The Current Scenario In Bitcoin Options Expiry

A number of analysts are focused on the large bitcoin and Ethereum options expire set to end before Halloween, even though cryptocurrency traders have been exuberant over the price rise. Set to expire is $750 million in Bitcoin as the prices could also get volatile according to data. 

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

As a great number of options are set to expire on October 30 as bitcoin and Ethereum markets are expected to be volatile at the end of the week despite the major price climb this month. Discussing the situation on Twitter on October 25 was the professional data and analytics firm Skew.com. 

Skew then tweeted that expiring this week, was 60k in bitcoin options with $ 750 mln+ notional. The 12th year anniversary of the Bitcoin white paper will be celebrated the very next day as the major expiry not only coincided with the price rise. Publishing an article about the trading uncertainty tethered to the expiry on October 30 was in addition to 

What Does Derbit Promise To Bitcoiners? 

Skew’s statistics the exchange holding the most bitcoin and Ethereum options contracts Derbit. 

Showing the current term structure of Derbit BTC options, Derbit published a chart. The Derbit report notes that the term structure tends to be upward sloping due to the time value of options.

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

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 Derbit according to Derbit’s crypto derivatives channel on Telegram. On the same day of which 164k is held at Derbit, additionally, 190k ETH options of $76 million will expire. 

Posing the question further is Derbit’s crypto derivatives signal channel:

Seeing a significant flipping of the one-month skew and Bitcoin testing yearly highs is this month. Coming just a few days before the eagerly watched US election is the 30 Oct ’20 expiry. 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 with over 7% of the expiry open interest fixated on the 13,000 strikes? 

As Skew Observes About Derbit

Skew tweeted about Derbit’s October expiry and said that dealers are likely long on Tuesday. The researchers then tweeted that on the Derbit for October expiry, 12k, 12.5k, 13k, and 14k calls were all open for 2k+ bitcoin options. With more than 5k options open, the largest strike is the 9k put. Its likely dealers are long against over writers judging by where the October vol is marked sub 40. 

Lots of times these secondary markets do nothing of course as speculators have put a lot of weight into the crypto futures and options markets. About big options expiring that are extremely boring, for instance, traders and analysts often talk about CME gaps that never fil.

After speculating on more than 87k worth of bitcoin options that expired on September 25, for instance, crypto traders expected lots of volatility.

Data from Derbit had shown the exchange held 67k worth (77%) of the 87k September 25 contracts similar to the upcoming pre-Halloween bitcoin and Ethereum options expiry. Later in the afternoon, that day historical BTC price statistics show bitcoin opened on the 25th at $10,248 and closed at a high of $10, 771. Going forward, the options markets had no effect on spot market prices. Ending up rising 24.4% since then the bitcoin markets did not end up being turbulent at all after the large expiry

To Conclude, What Is The Halloween Trick Or Treat For Bitcoiners? 

With promises to show more on Derbit, bitcoin and Ethereum prices are still on the rise. It is set to be seen what is being promised for bitcoin traders this Halloween. Is it a trick or treat? More to be viewed from the cryptocurrency giants. Stay tuned. We promise more insight into the matter.