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Options Trading for Bitcoin and Ether Record $20 Billion

Deribit informed CoinDesk that $4.5 billion worth of options are expiring this Friday. The total notional open interest in bitcoin and ether options on Deribit has surged past $20 billion. This growing interest in options reflects increasing market sophistication.

Later today, Deribit will settle monthly bitcoin and ether options, totaling several billion dollars. The crypto options market is flourishing, with the notional open interest reaching $20.64 billion on Deribit, closely matching the peak in November 2021.

This milestone signifies a substantial triumph for Deribit and highlights the broader market growth and rising interest in options among clients. Deribit controls 90% of global crypto options activity.

Options are derivative contracts providing the right, but not the obligation, to buy or sell the underlying asset at a predetermined price before a specific date. Record activity in options means investors and market makers will have a greater impact on determining spot market prices.

Market makers currently hold a net short gamma exposure in bitcoin, potentially influencing the price rally. BTC has surged 30% in the past two weeks, reaching over $34,000.

Today at 08:00 UTC, BTC and ETH options contracts worth $4.5 billion will expire on Deribit, injecting volatility into the market. Most open interest in bitcoin is concentrated in in-the-money (ITM) calls, especially those below the current market rate.

Deribit’s Luuk Strijers noted, “Options worth $4.5 billion will expire on Friday. That’s a particularly high value, with an uncommon percentage set to expire in the money (ITM) due to the recent market move, potentially prompting some market action.”