Crypto Options Worth $4.8 Billion Set to Expire This Week
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Traders and investors in the cryptocurrency market are on high alert as a staggering $4.8 billion worth of crypto options contracts approach their expiration date this Friday, September 29, 2023. These contracts, offering the right to buy or sell Bitcoin (BTC) and Ethereum (ETH) at predetermined prices in the future, are poised to exert significant influence over the two leading cryptocurrencies.
Deribit, the leading crypto options exchange, reports that the majority of these expiring contracts are Ether options, carrying a notional value of $1.8 billion, while Bitcoin options contribute $3 billion to the total. Keep in mind that one options contract on Deribit corresponds to one BTC or one ETH.
Crypto Options Expiry Are Big for the Market
Options expiries are closely monitored by market participants due to their capacity to shape market sentiment and drive volatility both prior to and following settlement. Quarterly expiries, occurring every three months, are of particular importance, consistently boasting higher volume and value compared to monthly counterparts.
Luuk Strijers, the Chief Commercial Officer at Deribit, said in an interview with CoinDesk that the current quarter aligns with previous trends in 2023, with expiries totaling $5.4 billion in June and $5.2 billion in March.
Strijers further unveiled that the “max pain” level for Bitcoin and Ether options expiring in September is set at $26,500 and $1,650, respectively. The max pain level signifies where options buyers stand to incur the greatest losses upon expiration. Options sellers typically strive to maintain prices near this level to mitigate their losses.
As of the latest data, Bitcoin and Ether were trading at $26,041 and $1,568, respectively. The outcome of this monumental options expiry remains uncertain, leaving market participants bracing for potential turbulence in the coming days.
