The largest cluster of ether call options for June's expiry date is concentrated at a strike price of $4,000, according to Deribit data.
Deribit Chief Commercial Officer Luuk Strijers shared charts with The Block that showed a notable grouping of ether call options at this strike price.
“As you can be see from Deribit data, the $4,000 strike is the largest of both June and September expiries. We don’t have the May expiry tradable yet so can only look at June versus April for ether," Strijers said.
Deribit data shows ether call options concentrated at $4,000 for the end of June expiry date. Image: The Block.
The concentration at the $4,000 strike price suggests that market participants have a particular interest or expectation that the price of ether will rise above $4,000 by the expiration dates of the options. This concentration may reflect a consensus or speculation about the potential future movement of ether's price in the market.
Deribit data shows ether call options concentrated at $4,000 for the end of September expiry date. Image: The Block.
Traders anticipating spot ether ETF approval
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According to an analyst, it is notable that the concentration of ether call options at a strike price of $4,000 comes after the potential approval of a spot Ethereum ETF by the end of May. The final approval decision deadline for spot ether ETF applications submitted by asset managers VanEck and Ark/21Shares to the U.S. Securities and Exchange Commission is May 23.
"Traders seem to be adjusting their ether options contracts with the May 23 date in mind," Bitfinex Head of Derivatives Jag Kooner told The Block.
However, Strijers said that it is too early to draw a conclusion regarding whether derivatives traders are anticipating a price appreciation following a potential approval of a spot Ether ETF. "June skew is higher than April indicating calls to be relatively more expensive however it’s difficult to link specifically to ether ETF news or expected correlation to BTC halving," he added.
Options are derivative contracts that give a trader the right but not the obligation to buy or sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy, and a put offers the right to sell. It is assumed that a trader who buys put options is implicitly bearish on the market, while a call buyer is bullish.
Ether's price increased by over 2% on Friday, changing hands for $2,470 at 5:30 a.m. ET, according to The Block's Price Page.
The price of ether has increased by over 2% in the past 24 hours. Image: The Block.
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