Over $730 million worth of Bitcoin and Ethereum options are expiring on October 6, presenting a potential catalyst for volatility in crypto markets.
According to the data, around 14,000 BTC options will expire on October 6, 2023, with a maximum pain point of $27,000. The dollar value of these options is approximately $400 million.
Additionally, 200,000 ETH options are expiring with a max pain of $1,650 and around $330 million in notional value.
$730,000 worth of Bitcoin & Ethereum options to expire Friday
Options expirations can lead to heightened volatility as market makers and speculators realign their positions around the expiry. However, trading volume and volatility have been muted in recent weeks. Historically, crypto markets tend to become more active in the fourth quarter, especially in October.
While Bitcoin drove an uptrend earlier in the week, implied volatility levels remain subdued across major cryptos. Deteriorating market liquidity also presents the risk of larger price swings around the option expiry.
The put-call ratio skews bearish at 0.89 for Bitcoin options and 0.87 for Ethereum options expiring this week. This indicates more put options betting on the downside were opened than calls betting on the upside. On August 25, 2023, crypto derivatives exchange Deribit settled $1.9 billion of Bitcoin options, highlighting the scale of what is at stake in these monthly expiries.