Potential Impact of Upcoming $3B Crypto Options Expiry on Stock Markets: What to Anticipate
Crypto Options Showdown: May 16 - The Big Expiry
Here we are, yet another Friday, and this one's packing a punch! Over 26,500 Bitcoin options contracts, worth a whopping $2.7 billion, are set to expire. Sound familiar? That's right, it's quite the deja vu from last week.
Derivatives crypto trading? Still catching its breath, it seems. Spot markets are thriving, with Bitcoin breaking back into six figures, but the momentum's starting to cool off as corrections take hold.
Bitcoin Options Challenge
So, what's going down with these mighty Bitcoin options? The ratio of puts to calls stands at a mere 0.99, illustrating an even match between sellers of short and long contracts. The max pain point? A cool $100,000 - just $4,000 below the current spot price. Quite the eye-catching level, which happens to harbor the most open interest, or the unexpired value, at a stunning $1.5 billion. Other notable strikes? $110,000 and $120,000, bets on a fresh all-time high.
Greeks Live dropped a market update this week, expressing that the crypto scene's a divided house. Some anticipate a new all-time high (ATH) by either May or June, but others predict a rejection before reaching that sky-high milestone. Some traders are feeling cautious, noting the market seems overextended, with specific focus on the $105k level as a potential reversal point. They're also spotting some defensive positioning among options traders, with profits being taken on long calls and a shift towards more conservative strategies.
aside: It's all about the tangible influence that these options contracts can have on the spot market. By acting as levers, they can intensify gains or amplify losses, leading to increased market volatility.
Ethereum's Not-So-Sleepy Expiry
Accompanying Bitcoin's big day are around 220,000 Ethereum contracts, with a notional value of $570 million, a max pain point of $2,200, and a put/call ratio of 1.24. With these combined, we're looking at a total crypto options expiry notional value of approximately $3.2 billion.
Crypto Market Outlook
Total market capitalization has slipped by 2% over the past 24 hours, falling to a hefty $3.45 trillion. Bitcoin has held its ground, with a 1.2% daily increase to reclaim $104,000, while Ethereum has remained unchanged, stuck around $2,570.
Things are mixed and matchy among the altcoins, with losses for XRP, Dogecoin, Chainlink, and Avalanche, and slight gains for Binance Coin, Sui, and Hyperliquid.
Don't forget to register for a free $600 account on Binance using this exclusive link! Still plenty of time until the Bitcoin options expiry, folks, so keep your eyes peeled for those price swings!
- The Bitcoin options expiry on May 16 involves 26,500 contracts, worth $2.7 billion, with a max pain point at $100,000 and a put/call ratio of 0.99.
- Meanwhile, Ethereum's expiry includes around 220,000 contracts, worth $570 million, with a max pain point at $2,200 and a put/call ratio of 1.24.
- Moving forward in the crypto market, trading strategies are split, with some expecting new all-time highs for Bitcoin and Ethereum, while others predict a correction before reaching those levels.
- In the technology world of finance, the influence of options trading can significantly impact the spot market, causing increased volatility and potentially amplifying gains or losses for both Bitcoin and Ethereum.
