On Nov. 13, a total of $525 million in Bitcoin (BTC) options open interest is set to expire. This is similar to last week when $470 million in options open interest also expired. This presents somewhat unusual activity as most volume goes through monthly and quarterly options.
On Nov. 5 (last Friday), put (sell) options open interest was 30% larger than call (buy) ones. Deribit exchange holds $431 million open interest for this Friday’s expiry and Bit.com has $72 million.
Before coming to quick conclusions on whether this figure is bullish or bearish, it’s important to take a more detailed view in order to gauge the potential buy and sell pressure near expiry.
For example, an $18,000 call option holder has not much gain in pushing up the Bitcoin price to $16,500 with less than 32 hours till expiry. These options are already deemed worthless by the market. The same can be said for a put (sell) option down to $14,000.
Thus, by excluding call options above $16,700 and put options below $14,400, traders can have attain a more realistic view of the current market conditions.
Deribit exchange holds 5,915 BTC call options ranging from $14,000 to $15,750. Bit.com has 1,050 BTC and OKEx currently holds 490 BTC. Therefore, there’s an immediate $117 million in open interest supporting current levels.
Meanwhile, the put options ranging from $15,250 to $16,500 amount to 2,130 BTC at Deribit, followed by 860 BTC at Bit.com, plus another 100 BTC at OKEx. Thus, the immediate sell-side pressure amounts to $48 million open interest from put options.
The reason behind this difference is that most put options have been depreciated and have no market value. This movement excludes 84% of the $298 million put options open interest.
Therefore when analyzing just the option strikes closer to market levels, there is a sizable $69 million imbalance favoring the buy-side. Similar to the previous week, there have been some large bearish trades likely related to U.S. elections.
Regardless of the market having enough strength to break the $16,000 resistance, those short-term options are currently supporting $15,500 and higher prices.
OKEx, Bit.com and Deribit weekly contracts mature Nov. 13 at 8:00 AM (UTC).
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cryptox. Every investment and trading move involves risk. You should conduct your own research when making a decision.
