In the past two months Open positions for ether options increased 50% to $ 3.1 billion, as the price of the ETH increased by 44% during this period. Ether price increase and growing open interest in options This resulted in a potentially historic maturity of $ 1.15 billion, which was set for March 26th.
Most exchanges offer monthly exposures. However, some also offer weekly options for short-term contracts. The most important due date was recorded in February 2021. with options contracts valued at $ 630 millionThis corresponds to 23% of all open positions at this point in time.
The above data shows that The expiration of the ethers on March 26th has 631,000 ETH contractsThis unusual concentration means that 39% of your open positions will expire in eight days.
It is worth noting that Not all options are traded when they expireas some of these strikes now seem unreasonable, especially when you consider there’s about a week left.
Not all options are created equal
Unlike futures contracts Options are divided into two segmentsWith call options, the buyer can buy Ether at a fixed price on the expiry date. These are used in neutral arbitrage trades or bullish strategies.
In the meantime, put options are widely used as Hedging or protection against negative price fluctuations.
To understand how these competing forces balance each other out, The call and put options should be compared at each strike price.
Options markets are an all-or-nothing game. This means that they have value or become worthless if they trade above the strike price of the call optionor the opposite for the holders of put options.
Therefore, by excluding neutral to bearish put options that are 20% below the current price of $ 1,800 and call options above $ 2,160, it is easier to assess the potential impact of the .TO expiration next Friday Incentives to pump or lower the price by more than 20% become less likely as the potential gains will seldom exceed the costs.
Based on this data, $ 160 million of call options remain between $ 1,000 and $ 2,160 for the expiration of the options added on March 26th. Meanwhile, The most bearish put options up to $ 1,440 are worth $ 95 millionHence, there is a $ 65 million imbalance that favors more bullish call options.
Bulls can show up after this month is up
While a $ 1.15 billion expiration of the option could be worrying, Almost 56% of them are already considered uselessThis was caused by excessive optimism from buyers of call options over $ 2,160 and the recent rise in the price of ether, which resulted in the destruction of the bear-neutral put options.
As for the remaining open positions, Bulls are in control largely because the recent price hike to $ 1,800 eliminated 83% of the bearish options.
As the expiration date approaches, more and more put options lose their value if ether stays at the current level, increasing the advantage of neutral to bullish call options.
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