Bitcoin Very Out of the Money (OTM) Put options are lighting up on longer-term expirations, as traders buy cheap lottery tickets for potential profits if BTC goes crazy.
On Deribit, the leading crypto options exchange, the $20,000 strike option is the second most popular among options expiring in June 2026, and has a notional open interest of more than $191 million.
Notional open interest is the dollar value of the number of active contracts. Put options with strike prices below the current BTC market rate are said to be OTM. These OTM puts tend to be cheaper than those close to or above the BTC spot price.
The June expiration also sees significant activity in other OTM puts at strikes of $30,000, $40,000, $60,000, and $75,000.
Activity in deep OTM puts is generally interpreted as traders preparing for a price drop. But that’s not necessarily the case here, as the exchange has also seen activity in higher strike calls above $200,000.
Together, these flows represent a bullish view on long-term volatility at low cost rather than a bet on price direction, according to Sidrah Fariq, global head of retail at Deribit. Think of it as cheap lottery tickets to a possible explosion of volatility in the next six months.
“There are around 2,117 open interests in the $20,000 bitcoin put option for the June expiry. We also saw some big trades in the $30,000 put and $230,000 call options. The combination of these out-of-the-money options does not suggest directional trades, but rather deep wing trades that professionals use to trade long-term volatility economically and adjust tail risk on their books,” Fariq told CoinDesk.
He explained that this is essentially volatility positioning, not price positioning, because the $20,000 put or the $230,000 call are simply too far from the spot price to be a purely protective hedge. At the time of writing, about $90,500 in BTC changed hands, according to data from CoinDesk.
Those who hold both OTM call and put options could make asymmetric profits due to extreme volatility or wild price swings in either direction. But if markets remain stable, these options lose value quickly.
Options are derivative contracts that give the buyer the right to buy or sell the underlying asset at a predetermined price at a later date. A put option grants the right to sell and represents a bearish bet on the market. One call offers the right to buy.
The crypto options market, including that tied to BlackRock’s IBIT ETF, has evolved into a sophisticated arena where institutions and whales engage in three-dimensional chess, managing risk and profiting from price direction, time decay, and volatility swings.
Overall, options market sentiment appears bearish as BTC puts continue to trade at a premium to calls across all timeframes, according to Amberdata options risk reversals. This is due, at least in part, to the persistent overwriting of call options, a strategy intended to increase returns on top of spot market holdings.
