High Stakes as Bitcoin Keeps a Close Eye on the September Options Expiry Worth $3B
Grand crypto options exchanges are expected to pay bitcoin options contracts worth billions of dollars on coming Friday.
According to analysts, this event is not expected to have a significant impact on bitcoin. However, it’s important to draw your attention to the fact that this cryptocurrency has come under intense pressure this week, following the macro risks and regulatory issues.
Based on data collected by Skew, the sum of options contracts that are set to expire on Friday is about 73,700, and they hold a value of $3.14 billion. Of this figure, almost 50,000 make up call options while the remaining ones are puts.
Industry pioneer Deribit is scheduled to settle over 85% of the total open interest.
LedgerPrime’s CIO, Shiliang Tang, explained what would happen if bitcoin were to break above the $50,000 mark.
In his opinion, this would necessitate traders who had sold their call options to consider hedging. Hedging is simply the practice of purchasing cryptocurrency in the futures or spot market, with the aim of minimizing losses resulting from a short call position.
If traders take this action, this will exert upward pressure on the crypto, boosting its gains. But, this is very unlikely to occur, taking into account Bitcoin’s steep 11% decline to $42,000 in recent times.
There are about 537 open put positions and 3,500 open call positions at the $50,000 hit. The most prominent for the September 24th expiry seems to be the $64,000 call option. Its open interest stands at 4,400.
Option expiries have had a very bad reputation in 2021. In particular, Bitcoin seems to always experience magnified price fluctuations in the days preceding and shortly after monthly settlements.