Impact of $7.7B Crypto Options Expiry on Today’s Markets

Approximately 89,000 Bitcoin options contracts are set to expire on Friday, September 27. These Bitcoin derivatives represent a notional value of about $5.8 billion.

This options expiry is particularly significant due to the month-end and the conclusion of the third quarter, potentially influencing spot markets, which have experienced gains this week.

Crypto Options Expiry

This week’s substantial wave of Bitcoin options contracts has a put/call ratio of 0.64, indicating that there are substantially more long (call) contracts expiring compared to short (put) ones. The maximum pain point, or the price at which the majority will incur losses, is situated at $59,000, about $6,000 below the current spot prices.

Open interest, which reflects the value or quantity of options contracts that have not yet expired, remains high at the $70,000 strike price with $872 million. Additionally, there’s $910 million in open interest at $90,000 and over a billion dollars at the $100,000 strike price, according to Deribit.

Greeks Live, a crypto options tooling provider, noted a robust rally for the asset class over the last three weeks, attributed to the Fed’s recent 50 basis point rate cut, which has significantly bolstered market confidence. They anticipate a bullish fourth quarter, pointing out several favorable conditions for the crypto markets.

“With the third quarter concluding, historical data suggests that the fourth quarter tends to perform well, and considering the upcoming US election and two rate cuts, numerous trading opportunities should arise.”

Greeks also mentioned that this quarterly delivery entails “a substantial number of repositioning and margin releases,” while indicating that major term implied volatility remains at lower levels.

“Following the conclusion of quarterly delivery, implied volatility continues to experience downward pressure, presenting a valuable opportunity to outline strategies for the fourth quarter in the last two weeks.”

27 Sep Options Data
89,000 BTC options are about to expire with a Put Call Ratio of 0.64, a Maxpain point of $59,000 and a notional value of $5.8 billion.
718,000 ETH options are about to expire with a Put Call Ratio of 0.47, a Maxpain point of $2,500 and a notional value of $1.9… pic.twitter.com/JWD30gCE5w

— Greeks.live (@GreeksLive) September 27, 2024

Ethereum Options Expiry

Approximately 718,000 ETH options are nearing expiration, representing a notional value of $1.9 billion. These derivatives exhibit a put/call ratio of 0.47 and a max pain point of $2,500. This culminates in a total crypto options expiry event valued at $7.7 billion, marking the largest since the end of March.

The crypto markets have seen a 1.4% increase today, bringing total capitalization to $2.37 trillion, the highest since early August.

Bitcoin reached $65,700, marking a two-month high, but pulled back to $65,300 during the early Friday trading session in Asia. Meanwhile, Ethereum struggled to surpass resistance at $2,650 and also saw a slight retreat as of the current writing.