More than 55,000 bitcoin options contracts worth $2.2 billion are set to expire this Friday, according to Skew Analytics.
Deribit holds the majority of bitcoin options contracts, according to derivatives exchange Deribit. In terms of BTC options, exchanges such as LedgerX, Okex and CME have followed in Deribit’s footsteps as far as positions are concerned.
Deribit will have 48,469 BTC options contracts (worth $1.95 billion) and 307,558 ETH options (worth $877 million) expiring tomorrow.
In the two weeks ending May 23, open positions on all expiration dates were almost halved to $6.5 billion.
Settlement of monthly options contracts has become increasingly important this year, with the “most painful point” – the strike price at which most open options contracts expire – before expiration (the last of the month Friday of the month) plays a role in hanging on.
For example, bitcoin fell from nearly $60,000 to $50,000 in the six days leading up to expiration on March 26, closing the gap between the spot price and the $40,000 most painful point at the time. Bitcoin rallied $4,000 to $54,000, reaching the most painful point before expiration in April.
The most painful point will attract the spot price when it is about to expire. This is because option sellers, mainly institutions, sometimes try to push the price to the most painful point, thus causing the most damage to option buyers.
The most painful point for bitcoin options expiring Friday is $50,000 – more than 25% higher than the current price of $39,000. As Switzerland-based options analytics platform Laevitas tweeted, some investors are betting that the most painful point effect will begin before settlement, pushing the price up to $50,000.
The size of the upcoming settlement is relatively small compared to previous bitcoin options expirations. a record $6 billion worth of contracts expired at the end of March, while exchanges settled more than $4 billion in options earlier on April 30.
As a result, the most painful point effects may not have much of an impact on the market until Friday’s settlement. However, other factors, such as renewed outflows of funds from crypto exchanges, may help the hard-hit cryptocurrency prices recover.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/data-2-2-billion-worth-of-bitcoin-options-set-to-expire-this-friday/
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