Options on BTC and ETH will expire today. How will this affect asset prices?
Options are derivative contracts that allow traders to buy or sell an asset at a specific price on a specific expiration date.
The notional value of the expiring 69,179 BTC contracts and 908,754 ETH contracts is $4.7 billion and $3.4 billion, respectively.
According to Deribit, the put to call ratio on BTC remains at 0.61. This means traders are still bullish and the number of calls, or long contracts, is outnumbering the number of puts, or short contracts.
It is quite difficult to predict how the market will behave on the expiration day of a large number of contracts.
However, traders need to monitor the situation closely to ensure that increased volatility does not trigger unwanted stop losses.
The impact of option expiration on the price of the underlying asset is short-term. As a rule, the very next day the market will return to its normal state, and strong price deviations will be compensated.
