Crypto volatility, options expirations create perfect storm, Deribit says

Blockworks
Blockworks

27 Jun 2023 6:23 PM

Billions of dollars in options contracts are going to expire this week, and the recent rally has caught short sellers off guard....

  • Billions of dollars in options contracts are set to expire this week in the crypto market.
  • The recent rally has caught short sellers off guard.
  • Exchange Deribit has around 150,000 bitcoin options contracts worth about $4.5 billion and about $2.3 billion worth of ether options contracts expiring on the same date.
  • Open interest is a key area to watch.
  • The volatility curve for the lower end of bitcoin is tilting upwards again, with the implied volatility of put options surpassing that of call options.
  • Traders have opened a huge amount of calls at greater than $30,000, which could lead to a gamma squeeze if bitcoin stays above $30,000.

The article discusses the potential for price turbulence in the crypto market due to the expiration of options contracts and the recent rally catching short sellers off guard. However, it also highlights the potential for a gamma squeeze if bitcoin stays above $30,000. Overall, the sentiment is neutral to slightly negative.

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You May Ask

What is the potential for price turbulence in the crypto market this week?How much are the bitcoin and ether options contracts worth that are set to expire on Friday?What is open interest and why is it important to watch?What is a gamma squeeze and how could it happen if bitcoin stays above $30,000?How has the implied volatility of put options compared to call options in the crypto market recently?

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