A significant amount of bitcoin and ether open interest is set to expire “in-the-money” on Friday, potentially leading to price volatility, according to Deribit’s Luuk Strijers. The upcoming expiry could heighten market activity as options contracts valued at billions of dollars are set to settle at 08:00 UTC on that day.
As of now, there are 90,000 BTC options contracts worth $5.8 billion due for settlement, alongside $1.9 billion in ether options. Deribit, the leading cryptocurrency options exchange, accounts for over 85% of global activity. Of the total bitcoin open interest, approximately 20% is currently “in-the-money,” which means they have favorable strike prices compared to the market rate.
Strijers noted that this larger expiry is likely to increase market volatility as traders may close or roll over their positions. Rolling over involves closing existing trades ahead of expiry and opening new ones for later dates, often allowing profitable positions to continue.
Looking ahead, the options market is expected to remain active, especially following the U.S. SEC’s approval of options tied to BlackRock’s bitcoin ETF (IBIT), which could drive institutional adoption. The pricing for upcoming options suggests a bullish outlook, with a negative put-call skew indicating that call options are relatively more expensive than puts.
The “max pain” level, which is the price point where option buyers incur the most losses at expiry, is set at $59,000 for this Friday. This level could exert some downward pressure on prices as expiration approaches, according to analysts. However, some market participants believe that the relatively small size of the crypto options market may limit its impact on spot prices.