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Bitcoin and Ether Prepare for $17 Billion Options Expiry Amid Fed Meeting
Options on Bitcoin (BTC $113,104.75) and Ether (ETH $4,001.69) worth around $17 billion are set to expire on Friday on the Deribit exchange — one of the largest monthly options expirations this year.
At settlement, 72,716 BTC call options and 54,945 BTC put options will expire, representing a notional open interest of approximately $14.4 billion.
Today, the Federal Reserve will hold a meeting to set U.S. interest rates, while major tech companies’ earnings reports are also expected this week.
Markets are bracing for a potential spike in volatility.
Options are derivative financial instruments that give investors the right, but not the obligation, to buy or sell an underlying asset at a predetermined price before a specific date.
A put option serves as protection against price declines, while a call option grants the right to buy and represents a bet on price appreciation.
Out-of-the-money (OTM) options account for 82.5% of open interest and dominate traders’ portfolios, indicating a strong speculative bias.
This suggests that while some traders may use OTM options as hedges against sharp price swings, the overall positioning reflects expectations of heightened volatility and major market moves.
Both call and put options are concentrated in the OTM zone.
There is significant open interest in call options at $120,000 and $130,000 strike levels, while put options are most active in the $100,000–110,000 range.
Bitcoin is trading around $113,000, with the market approaching the max pain level of $114,000 — the price at which the largest number of option contracts (both calls and puts) expire worthless, leading to minimal losses for option writers and maximum losses for holders.
As Bitcoin trades near peak volatility levels, its price sometimes gravitates toward this level before expiry due to market maker hedging, though this remains a theoretical effect.
Ether options show 375,225 ETH in call open interest and 262,850 ETH in put open interest, totaling $2.6 billion, with a max pain level at $4,110 compared to the current price near $4,000.
According to Checkonchain, before IBIT launched its options in November 2024, Deribit controlled nearly 80% of global Bitcoin options open interest.
Since then, its market share has fallen to 44%, now roughly equal to IBIT’s share.
See also: "Stablecoin market surpasses the GDP of 151 countries, reaching $312 billion"
