Bitcoin’s 9.25 billion magnesium option will expire this Friday (6/28)
The cryptocurrency options market sees a flood of expiry deliveries at the end of every month, and $9.25 billion worth of Bitcoin options are also expected to expire this Friday (6/28).
Marcel Pechman, who has 17 years of experience as a traditional financial sales trader and is currently a cryptocurrency analyst, pointed out that two months have passed since the Bitcoin halving, which may explain why there are 57% calls ( Call option) exercise price falls above $70,000. However, Bitcoin has been weak over the past two weeks, rendering these calls essentially worthless.
Pageman predicted that if Bitcoin remains near $61,500 at 4 pm Taiwan time on June 28, the call options with exercise prices of $62,000 and $64,000 will not expire. Likewise, puts (put options) at $58,000 and $60,000 will be void.
He also compiled June open interest contract data from several major exchanges:
Deribit Exchange: The leader in the options market, with open interest reaching US$6.65 billion, and the largest pain point being US$57,000.
CME Group: No. 2 with $1.15 billion in options market open interest
OKX Exchange: Ranked third with $735 million in open interest in its options market
Binance Exchange: Fourth place: its options market has an open interest of $520 million.
Overall, Bitcoin call + put open interest totaled $9.25 billion on June 28, which is considerable, but the overly bullish call data is what exaggerates the number.
Source: Deribit
Deribit will have more than $6.6 billion in Bitcoin options expire this Friday
Four situations arising from this Friday’s settlement price
Based on Deribit exchange data and current price trends, Pechman estimated that when the Bitcoin option expires this Friday, if the price occurs in the following four situations, the profit changes of the call and put options will be as follows:
Between $57,000 and $60,000: 660 calls vs. 14,850 puts. The net result is in favor of the puts, with an advantage of $820 million.
Between $60,000 and $62,000: 3,910 calls vs. 11,140 puts. The net result is in favor of the puts, with an advantage of $430 million.
Between $62,000 and $64,000: 5,220 calls vs. 8,690 puts. The net result was in favor of the puts, with an advantage of $215 million.
Between 64,000 and 66,000 US dollars: 6,880 calls vs. 6,940 puts. This result is that the long and short positions are approaching balance.
Simply put, if Bitcoin rises above $64,000 by expiration, bulls will avoid most losses; conversely, if Bitcoin falls below $60,000 support, the Air Force will have a potential $820 million advantage.
Bitcoin Options Face ‘Four Witches’ Day Tomorrow
Deribit CEO Luuk Strijers told foreign media that since June 28 is the end of the quarter, the derivatives market will face Quadruple Witching Day. Index futures, index options, options and futures contracts will all be on this day. maturity.
Among them, Deribit has cryptocurrency options with a notional value of more than $10 billion expiring tomorrow. Since many open contracts are in-the-money contracts, this means that as the expiration date approaches, the market may see large-scale trading activity.
Judging from the distribution chart of Deribit's open interest, the options market has also shown bearish sentiment in the short term, and Bitcoin traders generally expect that the market will not see a positive change until after July 12.
Source: Deribit
Deribit Bitcoin open interest contract distribution chart
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.