Bitcoin traders bet with options at $60,000 to $75,000

Bitcoin traders bet with options at $60,000 to $75,000

After Bitcoin surpassed $50 thousand in the previous days, all eyes turned to the actions in the options market. According to Bloomberg, option traders are expecting for a new ATH in Bitcoin.

Deribit, the biggest crypto options exchange, reported that the numbers of open positions in call options that will expire on March 29 and have strike prices of 60, 65 and $75 thousand has increased significantly. This demand for call options came after Bitcoin surpassed $50,000.

According to Vetle Lunde, senior analyst at K33 Research, “The broader options market is currently preparing for momentum that will continue in the coming months. There was a lot of trade in options contracts with strike prices that were significantly higher than the current market price from last week.” he said.

Interest rate cuts expected from the Fed and the halving increase optimistic expectations for the Bitcoin price. Hence, traders tend to open bull positions.

Jag Kooner, the Head of Derivatives at Bitfinex, said that the options with a strike price of $60,000 have the second-highest open position, after $50,000. He added that options with a $75,000 strike price are among the most traded when analyzed in terms of the number of transactions. Kooner also stated that many traders who expect the rise to continue while trying to surpass the $50,000 level, have already purchased cheap call options with strike prices much higher than the current Bitcoin price.

The increase in transactions in 60, 65 and 75 thousand dollars options shows the expectation that the Bitcoin price will rise to these levels in the coming months.

Option contracts are derivative; it is a contract to buy or sell the underlying asset at the striking price by the expiration date. There are two types of options: calls and puts.

The key elements of an options contract are:

  • Underlying asset: The asset upon which the option’s value is based.
  • Expiration date:The date when the option expires and becomes invalid.
  • Strike price: The agreed-upon price at which the asset can be bought or sold.
  • Option type: Call or put option, determining the right to buy or sell the asset.
  • Option price: The price or premium paid by the buyer to the seller for the right to buy or sell the asset at the strike price on the maturity date.

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