Will Markets Move With $2.2B in Crypto Options Expiring?

Around $2.25 billion in notional value cryptocurrency options contracts will expire on June 7. Roughly 18,000 Bitcoin options contracts are among them, and these have a notional value of $1.25 billion.

Today’s crypto options expiry event is a lot smaller than last week’s end-of-month contract expiry so impact on spot markets is likely to be minimal.

Bitcoin Options Expiry

Today’s batch of Bitcoin contracts have a put/call ratio of 0.67, with around a third more long contracts expiring than shorts. Moreover, the max pain point, or the price at which most losses will be made, is $70,000. This is currently slightly lower than spot prices, which are just over $71,000 at the time of writing.

According to Deribit, there is almost a billion dollars in open interest (OI) at the $75,000 strike price. OI refers to the number or value of open contracts that have yet to be settled. Bullish derivatives traders are also aiming at $80,000 and $100,000 strike prices, with OI at $890 million and $969 million, respectively.

With the Bank of Canada and the European Central Bank initiating interest rate cuts this week and the market performing better driven by both BTC and ETH ETFs, there is a “more optimistic market atmosphere as macro and news diverge significantly,” commented crypto derivatives tooling provider Greeks Live.

It added that Bitcoin’s major term implied volatility is around 50%, and Ethereum is around 55%, “both of which have fallen to a reasonable level.” IV is a measure of future expected volatility derived from expiring contracts.

June 7 Options Data
18,000 BTC options expired with a Put Call Ratio of 0.67, a Maxpain point of $70,000 and a notional value of $1.25 billion.
260,000 ETH options expired with a Put Call Ratio of 0.64, Maxpain point of $3,650 and notional value of $1 billion.
With the BOC and… pic.twitter.com/tsSENca8Pu

— Greeks.live (@GreeksLive) June 7, 2024

Ethereum Options Expiry

In addition to today’s expiring BTC contracts, there are 260,000 Ethereum options expiring with a notional value of $1 billion. These have a put/call ratio of 0.64 and a max pain point of $3,650, slightly lower than the current spot price of $3,820.

Greeks Live observed that this month’s Bitcoin market volatility will be strongly correlated with the macro news of the Fed’s interest rate decision while Ethereum is driven by news of the ETF approvals.

Crypto market capitalization was flat on the day at $2.78 trillion at the time of writing, but it has gained 4% over the past seven days. There has been very little movement for the majority of digital assets over the past 24 hours.