MarketsBitcoin's quarterly options settlement, valued at $16 billion, is set to conclude with a notable emphasis on call options.
Upcoming Expiration of Nearly $18 Billion in Bitcoin and Ether Options
On Friday, nearly $18 billion in bitcoin and ether options will reach expiration, which could significantly alter dealer hedging strategies and introduce short-term volatility.
By James Van Straten, Omkar Godbole | Edited by Stephen Alpher 57 minutes ago 3 min read
According to Deribit CEO Luuk Strijers, around $15.9 billion in bitcoin options and $2.1 billion in ether options will expire at 8:00 UTC on Friday. This expiration will account for 37% of Deribit’s total outstanding BTC open interest, which stands at approximately $43.5 billion. Open interest refers to the total dollar value of all active options contracts, with each contract corresponding to one BTC or ETH.
Strijers remarked, "This Friday's quarterly expiry on September 25 is among the largest of the year on Deribit. The September contracts are predominantly call-heavy, featuring a put/call open-interest ratio of 0.69, indicating a market positioned for higher prices."
A call option grants the buyer the right, but not the obligation, to purchase an underlying asset at a predetermined price before a specified expiration date. In contrast, put options serve to protect buyers from potential declines in the asset's price.
The crypto options market has seen substantial growth since 2020, with traders utilizing combinations of call and put options along with spot and futures contracts to express their market outlook, manage volatility, and account for time decay. As a result, quarterly options expirations have become critical events for crypto traders.
Traders closely monitor the concept of max pain, which refers to the spot price at which option buyers are likely to experience the most significant losses on expiration day. This theory, while debated, suggests that options sellers may aim to drive the spot price towards this point to maximize buyer losses.
For bitcoin, the max pain point is identified at $75,000, significantly lower than the current spot price of $85,500. Deribit describes this level as a "soft magnet for price into expiry."
Distribution of Open Interest
The $70,000 strike has the highest number of open contracts, with many of these call options now deep in the money. Strijers indicated that 55% of the $9.4 billion in call options set to expire are currently in the money, while most puts are nearly worthless. Overall, approximately one-third of the total $15.9 billion book is currently profitable.
Being in the money means that the option has intrinsic value, as the market price is favorable compared to its strike price. For call options, the underlying asset trades above the strike price; for puts, it trades below.
Jean-David Péquignot, Deribit’s Chief Commercial Officer, noted that the distribution of open interest across strike prices suggests a price floor around $75,000. He stated, "Open interest is heavily concentrated at the $85k, $90k, $95k, and $100k call strikes, indicating the influence of large call condor blocks as spot prices approach $86k. On the put side, defensive structures are firmly established at $60k, $70k, and $75k, creating a multi-layered support floor."
Market Dynamics on Expiry Day
The upcoming expiry could lead to market fluctuations, potentially resetting the trading range for bitcoin's spot price.
Strijers explained that the expiry will eliminate dealer-related hedging. He said, "As Bitcoin moved through the $80k–$87k range, dealer hedging of short call exposure likely contributed to the price increase. Dealers who are short on calls must buy spot to maintain their hedge as prices rise, which can amplify rallies. Once that gamma and hedging flow dissipates post-settlement, the stabilizing effect fades, short-term volatility may rise, and the prevailing price range could reset."
Additionally, traders will be observing the price action around $85,000 and how positions transition into October and December expiries. Rollover refers to the process where traders close or offset their current options positions while simultaneously opening similar positions for a later expiration date.
Bitcoin NewsRelated AssetsBitcoin$85,749.420.64%Ethereum$2,714.821.57%Latest Crypto News- 1MoonPay to acquire SEC-registered North Capital in $60 million all-stock deal 1 hour ago
- 2Live updates: Bitcoin slips under $86,000 as money rotates into BCH and ZEC 2 hours ago
- 3The S&P 500 has a 'breadth' problem. Crypto doesn’t. 2 hours ago
- 4Bitcoin consolidates near $86,000 as rally narrows and Brent slips below $100 3 hours ago
- 5BitMEX shuts down: perpetuals pioneer officially closes its doors after 11 years 3 hours ago
- 6FTX, Alameda-linked wallets send $75 million in ether to Wintermute, on-chain data shows 4 hours ago
- 7AI agents will soon buy their own computing power and data using stablecoins, according to BlackRock 4 hours ago
- 8Coinbase users can now borrow USDC against bitcoin at a fixed rate 6 hours ago
- 9XRP Ledger retries upgrade that allows banks to split payment and compliance duties 6 hours ago
- 10Solana begins testing an upgrade that could reduce finality from 12.8 seconds to 150 milliseconds 8 hours ago
The Definitive Stablecoin Landscape Series: Asia Pacific
As stablecoins enter regulated finance, the Asia-Pacific region is emerging as a vital testing ground. This report outlines the region’s regulations, use cases, and the role of RLUSD.
Why it matters:
As stablecoins transition into regulated finance, APAC is becoming an essential proving ground. This report details the region's regulations, applications, and the role of RLUSD.
View Full ReportMore From Markets