The expiration of $3.2 billion worth of Bitcoin options contracts on September 29th may impact market momentum. Most expiring contracts are calls, implying bullish sentiment.
Key Takeaways:
- September 29th marks the expiration of 118,000 Bitcoin options contracts, totaling a notional value of $3.2 billion.
- The current “max pain point” for these contracts is at $26,500, which is less than the ongoing spot price of Bitcoin, which recently surpassed $27,000.
- Alongside Bitcoin, Ethereum sees 1.1 million contracts set to expire, with a notional value of $1.8 billion.
- With a put/call ratio of 0.58, nearly two-thirds of the expiring contracts today are calls, implying bullish sentiment.
Bitcoin options contracts worth a massive $3.2 billion are due for expiration on September 29th. This event has the potential to influence the momentum of the cryptocurrency market. On this specific date, approximately 118,000 Bitcoin options contracts, with the aforementioned notional value, are set to expire. This monthly expiration surpasses the volume witnessed in previous weeks, marking it as a significant event.
🚨Options Expiry Alert, Sept. 29:
– 118k $BTC options due, max pain: $26.5k, value: $3.2B.
– 1.11M $ETH options expiring, max pain: $1,650, value: $1.8B.Stay alert! 📊🔍#Bitcoin #Ethereum #Crypto pic.twitter.com/7IKIq8zU2s
— TraderDAO Official (@TraderDAOai) September 29, 2023
Bitcoin Fluctuations
A notable metric in the options market is the “max pain point,” which stands at $26,500 for the current batch of expiring Bitcoin contracts. Interestingly, the spot price of Bitcoin has already exceeded this level, having reached over $27,000 recently. The “max pain point” denotes the price level with the highest volume of open contracts. It is also the point where the most significant losses transpire upon the expiration of these contracts.
Analyzing the nature of these options, the put/call ratio reveals that 0.58 of the contracts are puts, indicating that a significant majority, almost two-thirds of the expiring contracts, are calls or long positions. This demonstrates a generally bullish sentiment among investors. Providing more insights into this scenario, Greeks Live remarked that this expiration is a quarterly delivery, and historically, Q3 has been relatively flat. Additionally, they observed that the third quarter is typically the least active, with a noticeably lower share of puts compared to weekly expirations.
Concluding Thoughts
The expiration of a sizable volume of options contracts invariably brings heightened attention to potential market movements, given the weight such events can carry. The bullish sentiment, as inferred from the majority of calls, may indicate optimism in the market. However, investors should tread cautiously, considering various factors and dynamics at play. The upcoming expiration, especially with its massive scale, might introduce increased volatility. While the current market momentum seems positive, it’s crucial for investors to stay informed and vigilant in this ever-evolving landscape.