Big Options Expiry This Friday

One of the largest crypto derivatives exchanges, Deribit, has a boatload of $BTC and $ETH options set to expire Friday. 📆

This colossal expiry includes 1.217 million BTC and ETH options contracts. These derivatives could either be a goldmine or a complete bust, depending on the trading trajectory of the top two cryptocurrencies by the week’s end. 

Luuk Strijers, the Chief Commercial Officer at Deribit, shared some insights, stating, “This September, $3 billion in BTC options and $1.8 billion in ETH options will expire, with the Max Pain level close to current price levels.” For the uninitiated, Max Pain is the point where options buyers are likely to incur the most losses at expiration.

Adding to the tension, according to data from onchain analytics firm Glassnode reports that the current options open interest is hovering around a staggering $10 billion.

Click to enlarge.

Moreover, the Options Open Interest Put/Call Ratio across all exchanges is currently at 0.46948574, adding another layer of intrigue to the market dynamics.

Click to enlarge.

Why is this important? Well, let’s dive into some of the metrics. 🤽‍♂️

The Options Open Interest Put/Call Ratio is a metric used by traders to gauge market sentiment. It is calculated by dividing the open interest of put options by the open interest of call options. Here’s a quick breakdown of how to interpret the ratio:

  • Put Option: Gives the holder the right to sell an asset at a specified price.
  • Call Option: Grants the holder the right to buy an asset at a specified price.
  • Open Interest: Represents the total number of outstanding option contracts in the market.

Interpretation of the Put/Call Ratio:

  • Ratio < 1: Indicates more open call options than put options, suggesting that most traders anticipate the underlying asset’s price to rise. This is typically seen as a bullish market sentiment.
  • Ratio = 1: Implies that the number of open call options is equal to the number of open put options. This neutral scenario indicates a balance between bullish and bearish market sentiments.
  • Ratio > 1: Signifies more open put options than call options, implying that most traders expect the underlying asset’s price to decrease. This is usually interpreted as a bearish market sentiment.

A Put/Call Ratio of 0.46948574 suggests a predominantly bullish sentiment in the market, with more traders opting for call options in anticipation of a rise in the price of the underlying assets. This could imply a general optimism about the future price movements of the related cryptocurrencies. 📉

Learn More About...

More in   Crypto

View All

Noah Perlman: That’s A Lot Of Controversy

Noah Perlman, the chief compliance officer at Binance, has a past involving not only major crypto scandals but also some of the world’s most sensational controversies. 🌎

And the list is kind of nuts.

Read It

Technically Speaking – November 17, 2023

This Technically Speaking article is long as we review some of the various charts we’ve looked at over the past four to six weeks. 

Included in today’s Technically Speaking are: Chainlink, Uniswap, Monero, and Ethereum.

Read It

Technically Speaking – November 22, 2023

If the culmination of all known and unknown variables is represented through price action, then yesterday’s Binance and CZ FUD was a nothing burger. 🍔

Binance, Kraken, the SEC, crime, bla bla bla bla, just noise – let’s look at some of the charts and see what price is doing, not how much noise the news is making. 

Read It

Zhao Waves Farewell to Binance CEO Role in a $4.3 Billion DOJ Deal

In November 2022, FTX collapsed, and Sam Bankman-Fried’s road to ruin began. The crypto market at the time was already on a route, down -66% from its August 2021 all-time highs. 📺

CZs tweet in November 2022 triggered another wipeout in crypto, with the total market cap dropping -27.5% over seventeen days, extending the total loss from the all-time high to -76%. 

In one year, two things: tried SBF and found him guilty. Then they pulled off a somewhat less dramatic but nonetheless major takedown (via massive fines and settlement) of Binance and its now former CEO, CZ. 

According to the presser released by the DOJ, here’s a quick rundown of what went down:

  • Binance Pleads Guilty: Binance Holdings Limited pleaded guilty to anti-money laundering, unlicensed money transmitting, and sanctions violations.
  • Historic Penalty: Binance agreed to pay over $4 billion to resolve the Justice Department’s investigation, marking one of the largest corporate penalties in U.S. history.
  • CEO’s Guilty Plea: Changpeng Zhao, Binance’s CEO, also pleaded guilty to failing to maintain an effective anti-money laundering program and resigned as CEO.
  • Coordinated Resolutions: The plea is part of coordinated resolutions with the Department of Treasury’s FinCEN, OFAC, and the U.S. Commodity Futures Trading Commission (CFTC).
  • Attorney General’s Statement: Attorney General Merrick B. Garland emphasized that Binance’s rise was partly due to its criminal activities and stressed the consequences of using technology to break the law.
  • Treasury Secretary’s Remarks: Janet L. Yellen highlighted Binance’s willful legal failures, allowing money to flow to terrorists and other criminals through its platform.
  • Deputy Attorney General’s Warning: Deputy Attorney General Lisa O. Monaco warned crypto and DeFi companies about the importance of complying with U.S. law.
  • Intentional Violations: Binance and Zhao willfully violated anti-money laundering and sanctions laws, threatening U.S. financial systems and national security.
  • Binance’s Growth Strategy: Binance prioritized growth and profits over compliance, knowingly operating without anti-money laundering safeguards and allowing illegal transactions.
  • Forfeiture and Fine: Binance agreed to forfeit $2.51 billion and pay a criminal fine of $1.81 billion, totaling a financial penalty of $4.31 billion. They also agreed to retain an independent compliance monitor for three years and enhance their anti-money laundering and sanctions compliance programs.
  • Zhao’s Role: Zhao admitted to prioritizing Binance’s growth over compliance, causing illegal transactions, and failing to implement effective anti-money laundering protocols. 📻

A few hours after the Binance and CZ news came out, Coinbase’s CEO, Brian Armstrong, took to X:

From the perspective of gaining, keeping, and acquiring the US crypto customer base, Coinbase is sitting pretty nicely right now. 


Read It