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$1 Billion in crypto-options are expiring in 48 hours

Updated: Jul 25, 2024
Published: Jun 24, 2020
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The Options Surge

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In recent months, options in the world of cryptocurrencies have become increasingly popular to the point that over $1 Billion are due to expire on the 26th of June. This phenomenon is not unique to the cryptocurrency market however as we saw with equities recently. Below is the recent upsurge in Google trends for puts and calls.

[caption id="attachment_16261" align="aligncenter" width="1998"]size-full wp-image-16261 Put Option (blue) & Call Option (red)[/caption]

Previous Market Trends

This phenomenon is not an exception or something we see for the first time within the cryptocurrency market. In fact, in 2017/18 a similar thing happened with another derivative: perpetual swaps. The latter, popularized by BitMEX, brought on huge volumes as people began "gambling" using extremely high leverage (100x). This, for many, has ended in very large losses as they did not fully understand the contracts they were trading, nor had enough trading experience/knowledge.

$1 Billion

On Friday, $1 Billion in both BTC & ETH options are due to expire. The unwinding of the positions is expected by many to cause volatility; something the market has been missing. On another note, looking at these options, the majority of them would expire worthless within the [$8,000-$10,000] range which would let most of these options sellers keep the premiums paid.

The following graph, posted by Deribit, shows where the "max pain" area is; the lowest point of the red-dotted line. Which thus far it seems these might expire in this area.

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