In brief – About $11 billion in Bitcoin options, roughly 135,000 BTC and a third of Deribit’s Bitcoin options open interest, expire on Friday. – Max pain, the price where option sellers pay out the least, sits at $78,000 against a market price near $81,500, and about 86% of the…
ntracts are out of the money. – The Fed held rates at 3.75% to 4% on Wednesday in a 10-2 vote with two dissenters favoring a hike, and the 10-year Treasury yield closed at 5.05%. About $11 billion in Bitcoin options expire on Friday on Deribit, a crypto options exchange, with Bitcoin trading near $81,500 a day after the Federal Reserve held interest rates steady while two of its officials voted to raise them
Even people who never touch options have a stake, because the traders who sold these contracts must buy or sell real Bitcoin to hedge as the price moves, which can add to swings without any news behind them. An option is a contract that gives its holder the right, but not the obligation, to buy (a call) or sell (a put) Bitcoin at a fixed price, called the strike, by a set date. Friday’s batch covers about 135,000 Bitcoin in contracts, roughly 88,700 calls and 46,500 puts, per Deribit’s data.
That equals about a third of all Bitcoin options open on the exchange and roughly 70% more than the $6.4 billion that expired in August. The put-to-call ratio, which compares bets on a drop with bets on a rally, is 0.52, so calls outnumber puts nearly two to one, which means there’s optimism in terms of price going up. The $11 billion is notional value, the face value of the contracts at today’s price, not money changing hands.