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Expiry date: Bitcoin options are expiring – what will the markets expect? | message


Bitcoin options expire on June 26th. out
Numerous call options
Roll over or cash out?

The open interest in bitcoin options on the Chicago Mercantile Exchange (CME) and on other platforms has increased significantly in recent weeks. However, the popularity of financial derivatives also has a disadvantage: that is, when a large part of the options expire – on the crypto market, this could influence prices.

New expiration date is approaching

A total of 100,000 Bitcoin options with a total value of around $ 930 million expired on Friday, June 26, as Cointelegraph reports. Much of the options are traded through the currently largest platform for bitcoin options, the derivatives exchange Deribit in Panama, which holds around 50 percent of the expiring 100,000 BTC options.

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Another part is traded on the CME, which are almost exclusively call options, i.e. bets on a rising Bitcoin price. As it goes on to say, 75 percent of the currently open positions are said to be bets speculating on a Bitcoin price of $ 11,000 and above – a rather unlikely scenario.

What options investors can expect

The expiry of the call options could affect the Bitcoin price. In this context, the direction will be particularly whether Bitcoin manages to break the $ 11,000 mark. However, the cryptocurrency is currently trading at around $ 9,410, which is significantly below the price limit. (As of June 19, 2020)

However, strong price fluctuations have always occurred since the cryptocurrencies existed, and strong volatility has always determined the crypto market. So if the Bitcoin bulls are right and the cryptocurrency makes the jump to $ 11,000 by the time options expire, this would activate another 14,900 BTC in off-balance-sheet option contracts. Every $ 100 above this level would bring an additional $ 1.5 million in profit to call option buyers, Cointelegraph said.

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However, if the Bitcoin bulls think it is unlikely that this development will occur, they may sell their contracts before Friday’s expiry and stock up on new contracts. This “roll-over” gives them their positions. Against this background, the Bitcoin price itself could fluctuate, but massive price movements due to the imminent expiry of the Bitcoin options are unlikely.

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Image sources: Andrey Burmakin /, Dim Dimich /

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