Around $11 billion in Bitcoin options expire on crypto derivatives exchange Deribit on Friday, about a third of all open Bitcoin options on the platform.
The expiry covers roughly 135,000 BTC, split between about 88,700 call options, which pay out if the price rises, and 46,500 put options, which pay out if it falls.
The $11 billion is notional value, the face value of the contracts at current prices, not the amount of money that will actually change hands.
Max pain is close
The max pain level for the expiry, the price at which the greatest value of options would expire worthless, is $78,000.
After Thursday’s sell-off following the suspected Binance hack, Bitcoin was trading at about $78,800, down nearly 3% on the day, putting it within about 1% of that level.
Where the bets sit
The put to call ratio is 0.52, meaning calls outnumber puts by nearly two to one.
The largest groups of calls sit at $95,000 and $100,000, about 21% and 27% above the current price. The biggest group of puts is at $70,000, about 11% below it. Most of the contracts are out of the money, meaning they would expire worthless at today’s price.
The expiry is about 70% larger than the $6.4 billion that expired in August.
The backdrop
The Federal Reserve held interest rates at 3.75% to 4% on Wednesday, in a 10 to 2 vote. The two dissenting officials wanted a rate rise. The 10-year Treasury yield closed at 5.05%.
What happens next
Large expiries can bring short-term price swings as traders close or roll positions, although the effect is often smaller than the headline number suggests. The next major expiry is on 25 December, covering about 135,500 BTC, around two weeks after the Fed’s 8 to 9 December meeting.
