This Friday, June 26, around $1B-worth of Bitcoin and Ethereum options contracts on Deribit — the leading crypto options exchange — are due to expire. This is an important milestone in the options market, especially as this market has grown rapidly over the past year led by the developing trading needs of market participants. The sector is now of the size that it can begin to tangibly have an effect on the market microstructure for spot Bitcoin and Ethereum and there’s good reason to think that Friday could be a noticeably volatile day for the cryptoasset.
In total around 70,000 Bitcoin contracts are due to expire, 290,000 Ethereum contracts are set to expire on the same day. Market makers and traders that were either long or short positions in these options contracts were likely hedging exposure through the spot or futures markets. This means that as some of these contracts expire, the underlying spot markets of Bitcoin and Ether may be subject to some volatility as traders unwind their positions.
According to Deribit Insights, of the options that are due to expire on June 26, there are 20,000 out-of-the-money (OTM) puts and 50,000 OTM calls with strike prices between $5,000 and $15,000. Of these contracts, there is a 2:5 put-call ratio which has typically indicated a bullish sentiment among traders.
In what is expected to be a volatile day, our suite of leveraged tokens may offer a way for traders to benefit. You can learn more about our 3x and -3x leveraged daily Bitcoin and Ether tokens below and they’re currently available on Bitcoin.com Exchange (with fee-free trading) and Liquid: