bitcoin and ether About $17 billion worth of options will expire on Friday on Deribit in one of the largest monthly options expirations of the year.
There are 72,716 BTC call options contracts and 54,945 BTC put options contracts that need to be settled, representing a combined notional open interest of approximately $14.4 billion.
With the Federal Reserve meeting today to set US interest rates and earnings from major technology companies scheduled for this week, markets are bracing for a possible increase in volatility.
Options are derivative contracts that give investors the right, but not the obligation, to buy or sell an underlying asset at a predetermined price before a specific date. A put option acts as insurance against price declines and a call option provides the right to buy and represents a bullish bet on the underlying asset.
With 82.5% of open interest, out-of-the-money (OTM) options dominate traders’ holdings, showing a clear preference for speculative positioning. This suggests that while some traders may be using OTM options as a hedge against sharp price movements, overall positioning reflects an expectation of higher volatility and significant market swings.
Both calls and puts are heavily clustered in the OTM region, with significant call options open interest around strike prices of $120,000 and $130,000, while puts dominate at $100,000 and $110,000.
With bitcoin trading near $113,000, the market is gravitating towards the top pain level of $114,000. That represents the price at which the greatest number of options contracts (both calls and puts) expire worthless, causing the least financial loss for option writers and the greatest for option holders.
As Bitcoin trades near the maximum pain level, the price action sometimes gravitates towards it before expiration due to hedging activity by market makers; However, this is just a theory.
Ether options show 375,225 ETH in buy open interest and 262,850 ETH in sell open interest, representing a theoretical total of $2.6 billion, with a maximum pain level of $4,110 compared to a current price of around $4,000.
According to Checkonchain, before IBIT launched options in November 2024, Deribit controlled nearly 80% of the global bitcoin options open interest. That share has since dropped to 44%, equal to IBIT’s market share.
