Today, $ 3.6 billion worth of Bitcoin options expire. This offers speculators the last chance to buy or sell Bitcoin at a set price.
Bitcoin options offer traders a unique opportunity to buy or sell BTC at a set price. The price of an options contract depends on the time of purchase, the exercise price and the date of expiry. The exercise price of an option is the price at which the underlying asset can either be bought or sold.
The figure above shows the distribution of Bitcoin (BTC) options that will expire on April 30th. According to the crypto derivatives exchange Deribit, the current “maximum pain price” at which Bitcoin expires is $ 54,000, which is very close to the current price of Bitcoin. At the time of writing, BTC is trading at $ 54,403.
The biggest pain point is the price at which the Bitcoin options buyer loses the most in the market.
In other words, the maximum pain price will cause investors who previously bought options to lose their time and opportunity costs of reinvesting option premiums. This is the price that makes most options worthless as it is no different from buying or selling Bitcoin on the public trading market. However, the holders of the option must still pay the option premiums to guarantee their spot.
Source: BTC Option Open Interest By Strike Price on Expiration Date of April 30 via Bybt
The exercise price for most of the call options and put options on April 30 was approximately $ 54,000. Around this level, a total of 960.5 BTC call options and 771.4 BTC put options expire. Generally the call / put ratio is 1.44, greater than 1, proving that there are more bullish investors out there.
As can be seen from the above figure, there are still many investors with high open interest at a strike price of around $ 80,000, and the open interest has reached 7.76,000 BTC.
Open interest is the number of options contracts held by investors in all markets after the end of the previous trading day.
With the current price hovering around $ 54,000, Bitcoin doesn’t seem bullish or bearish in the short term Bitcoin consolidation can continue for a longer period of time.
Since the holders of the bullish contract who have amassed Bitcoin at a high strike price are most likely not to exercise the option. If they choose this option, these investors buy Bitcoin at a higher price, which increases the price.
Conversely, most of the bearish open positions are concentrated at $ 50,000 and $ 52,000 worth 3.75,000 BTC and 4.06,000 BTC. There is also not a high probability that bearish speculators will be willing to sell assets at that set price.
It should be noted, however, that the maximum pain price of options contracts with an expiration date of May 7th is $ 56,000, above the current “maximum pain price” of $ 54,000. This shows that there are more bullish investors out there who could push the price of Bitcoin to $ 56,000 next week.
Currently, open positions in Bitcoin options total $ 13.54 billion, of which more than 88% comes from Deribit, the world’s largest crypto derivatives exchange. The total number of expiring options contracts is estimated at approximately 68,500 BTC.
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