Bitcoin
BTC$106,229.85
Put-call ratios are scheduled for expiration dates for the multi-billion-dollar option on Friday at Delibit, but their traditional bearish interpretation may not tell the full story of this time.
The Put-Call Open Interest ratio refers to the ratio of active Put Contracts to active call contracts at a given time. An increase in put call ratio indicates a bias towards put options, provides protection against negative side risk and is interpreted as representing bearish market sentiment.
However, the latest spikes are driven at least in part by “cash seher puts,” i.e., accumulation strategies of yields and BTC. This strategy involves selling (writing) put options. This is a move similar to selling insurance against price drops in exchange for small advance premiums.
At the same time, the writer holds enough cash (stablecoins) for the bystanders to purchase BTC as an obligation if the price drops and the buyer decides to exercise the right to sell BTC at a given higher price.
The premium collected by creating put options represents yields with the possibility of BTC accumulation if the PUT buyer exercises the option.
“The put-to-call ratio rose to 0.72, slightly above 0.5 in 2024, indicating a growing interest in the PUT option.
The $14 billion approaching option expires
At 08:00 UTC on Friday, totaling 141,271 BTC options contracts (valued over $14 billion), totaling over $14 billion, according to data source Delibit Metric.
Of the total settlement, 81,994 contracts will be invoked, with the rest being optional. In Deribit, one option contract represents one BTC.
Chen says that nearly 20% of expired calls are “in the money.” That is, a large number of market participants are holding calls on strikes below BTC’s current spot market rate of $106,000.
“This suggests that Cole buyers are working well in this cycle and working with the sustained inflow into BTC ETFs,” Chen pointed out.
Holders of In-The-Money (ITM) calls are already making profits and may even book profits as their expiration dates approach or choose to hedge their position. Alternatively, you may roll over (shift) the position to the next expiration date.
“This is a major quarter expiration date, so we expect to see more volatility regarding the event,” Chen said.
BTC Options: Open interest distribution at the June 27th expiration date. (Delibit)
Roughly speaking, most calls are set to expire outside of money or no value. In particular, the $300 call has the highest open interest. This is a sign trader who is likely to have wanted an oversized price rally in the first half.
The biggest pain at expiration date is $102,000, which is the level that optional buyers suffer most.
Focus on the $100,000 to $100,000 range
The latest market trends show expectations for trading before and after, with a slight bullish bias as we approach the expiration date.
Data tracked by the leading Crypto Market Maker WinterMute shows that the latest flows are skewed, with traders selling Straddle (a bearish strategy for volatility) writing that it had an expiration date of around $105,000 on June 27th and a short term of $100,000.
“For the #BTC option, straddle/cole will seduce 105,000 short puts at 100k (June 27th) in a loose neutral.
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