Bitcoin’s $4.2B October Options Expiry May Increase Short-Term Volatility
The crypto market is poised for short-term volatility due to the expiration of monthly bitcoin (BTC) and ether (ETH) options contracts worth $4.2 billion and $1 billion, respectively, on Friday. Over $682 million in BTC options, or 16.3% of the total, are set to expire "in-the-money," primarily as calls. This situation may lead to market fluctuations as holders of profitable options adjust their positions. The bitcoin put-to-call open interest ratio is 0.62, indicating bullish sentiment. BTC is trading near $67,000, above its max pain level of $64,000, while ether is around its max pain level of $2,600. The max pain theory suggests traders may drive prices closer to these levels before expiry. The crypto options market has expanded significantly, but remains small compared to the spot market. The SEC has approved options tied to spot bitcoin ETFs, with expectations for trading to begin in Q1 2025.
