- Over 50,000 Bitcoin worth of Bitcoin options are due to expire on August 28.
- Bitcoin options open interest remains below $2 billion.
Despite Bitcoin seeing a stellar rise in recent weeks, another significant event looms overhead. The Bitcoin options market is due for another large expiry towards the end of this month. Data from Skew, a cryptocurrency analytics platform, shows that over 50,000 Bitcoin worth of options are due to expire on August 28. While this expiry is not as large as June’s 114,700 Bitcoin expiry, it is still fairly large.
Bitcoin options offer traders the ability to purchase or sell Bitcoin at a predetermined price (strike price) on or before the options expiry date. Traders can choose between calls and puts.
Calls allow option holders to purchase Bitcoin at a specific price, also known as the strike price. If a trader purchases a call option and the price of Bitcoin rises past the strike price, the trader will be able to net the difference between the spot and strike price.
Puts allow traders to do the opposite. If a trader purchases a put and the price of Bitcoin falls below the strike price, the trader will be able to sell Bitcoin at the strike price and net the difference between the spot price.
Traders pay a specific price for the option, also known as the option premium. If the price action does not follow what the trader anticipated, they can decide not to exercise the option, therefore minimizing their downside to just the premium they paid for the option.
Open Interest Remains Below $2 Billion
Meanwhile, data by Skew shows that the Bitcoin options open interest remains under $2 billion with Deribit continuing to dominate.
Open interest helps quantify market interest in a particular asset. The figure is calculate using the total outstanding contracts for the asset at the end of the trading day.
Disclaimer: Content displayed on thecryptoassociate.com is not investment advice. Investors should do their own research before investing in digital assets or anything displayed on this site. The Crypto Associate does not recommend trading any sort of investment in cryptocurrencies and digital assets. The Crypto Associate is not responsible for any losses incurred due to the buying or selling of cryptocurrencies displayed on this site. All content is for informational purposes only. The Crypto Associate does not endorse, affiliate or represent any third-party links including advertisements. The Crypto Associate participates in affiliate marketing. Read the full disclaimer