- Over 100,000 Bitcoin worth of Bitcoin options are due to expire by the end of the month.
- Bitcoin options open interest soars back above $2 billion.
The Bitcoin options markets is due for another massive options expiry later this month. Data from Skew, a cryptocurrency analytics platform, shows that over 100,000 Bitcoin in Bitcoin options are due to expire by the end of this month. Nearly 80,000 Bitcoin of this figure will expire on September 25th.
Buying Bitcoin options offer traders the choice to purchase or sell Bitcoin at a predetermined price on or before the options expiry date. When purchasing options, traders can choose between calls and puts.
Bitcoin 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.
Bitcoin 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.
Meanwhile, data by Skew shows that the Bitcoin options open interest has soared past $2 billion again, 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.
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