- The Bitcoin options market is due for another massive expiry tomorrow.
- Prior to the expiry, open interest is reaching record levels.
The Bitcoin options market saw a record expiry last month, as reported by The Crypto Associate. However, data by Skew, a cryptocurrency analytics platform, shows that the options market is due for another massive expiry. Tomorrow, July 31, more than 68,000 Bitcoin worth of Bitcoin options are due to expire.
Bitcoin options allow option holders the right to purchase or sell Bitcoin at a predetermined price on or before the option’s expiry. Traders can choose between calls and puts.
Bitcoin calls allow option holders to purchase Bitcoin at a predetermined price, also known as the strike price. If Bitcoin’s price rises above the strike price, the option holder will likely exercise the option and purchase Bitcoin at the strike price.
Bitcoin puts allow option holders to sell Bitcoin at a predetermined price, also known as the strike price. If Bitcoin falls below the strike price, the option holder will likely exercise the option and sell Bitcoin at the strike price.
In order to purchase an option a trader must pay a premium. If the price action does not follow, traders can simply decide not to exercise the option and limit their downside to just the premium they paid for the option.
Bitcoin Options Open Interest At Record Highs
Following last month’s expiry, Bitcoin options open interest has began to quickly recover. Bitcoin options open interest is now soaring to new highs prior to the massive expiry.
Open interest may help quantify the 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.
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