The U.S. options and futures exchange CBOE expects to clear Friday’s expiring Bitcoin binary call/put on its website, setting the stage for a possible further rally in this digital currency that has hit all-time highs of around $10,000
The “bitcoin options expire time” is a type of option that allows traders to buy or sell a contract at the expiration date. The expiry for this type of option is Friday, December 15th.
The price of Bitcoin (BTC) has fallen this week, and bearish will constantly look for a reversal signal anytime the price rises, such as the 8% increase on Nov. 28. Technical analysis isn’t a precise science, so there’s room for interpretation, and most traders examine numerous periods to discover a story that fits their perspective.
Bitcoin’s price is now in a declining channel that began on Oct. 31, and if this pattern holds, Bitcoin might plummet below $50,000 in the near future.
On FTX, there is a Bitcoin/USD price. TradingView is the source of this information.
Concerns over a new COVID-19 variation spurred a worldwide market sell-off on Nov. 26. Cryptocurrency markets plummeted. Bears saw a $215 million potential profit on Friday’s options expiration when Bitcoin sank below $54,000, but that reversed as BTC price reclaimed the $57,000 support.
Furthermore, regulatory worries from the US continue to put downward pressure on the market. The head of the United States Senate Banking Committee requested information from stablecoin issuers and exchanges by December 3rd.
The President’s Working Group on Financial Markets produced a study in early November recommending that stablecoin issuers in the United States be subject to “proper regulatory monitoring” comparable to bank law.
Bitcoin bearish are expected to earn $80 million on December 3 options expiration, fueled by the possibility of government intervention and unfavorable short-term effects.
Open interest in bitcoin options on December 3rd. Coinglass.com is the source of this information.
The $460 million call (buy) and $485 million put (sell) options seem to be fairly balanced at first glance, but the 0.96 call-to-put ratio is misleading since the 17 percent price decrease from $69,000 would likely wipe out most of the bullish bets.
If Bitcoin’s price stays below $57,000 at 8:00 a.m. UTC on Friday, for example, just $24 million worth of call (purchase) options will be available at expiration. As a result, if Bitcoin is trading below $60,000, the right to acquire it at that price is worthless.
Bears are content with Bitcoin trading below $57,000.
The four most probable possibilities for the $950 million options expiration on December 3 are shown below. The possible profit is represented by the imbalance favoring either side. In other words, the number of active call (buy) and put (sell) contracts fluctuates based on the expiration price:
- 290 calls vs. 3,480 puts between $54,000 and $56,000. The overall outcome favors the put (bear) options by $175 million.
- 750 calls vs. 2,160 puts between $56,000 and $58,000. The overall outcome favors the put (bear) instruments by $80 million.
- 1,510 calls vs. 1,040 puts between $58,000 and $60,000. As a consequence, the call (bull) options have a $30 million advantage.
- Over $60,000, there are 2,760 calls and 860 puts. The overall outcome favors the call (bull) instruments by $115 million.
Call options are employed solely in bullish wagers, whereas put options are used exclusively in neutral-to-bearish transactions, according to this rough estimate. This oversimplification, however, ignores more complicated investing techniques.
A trader, for example, may have sold a call option to get positive exposure to Bitcoin (BTC) above a certain price. However, there is no simple method to measure this impact.
To balance the scales, the bulls need $58,000 or more.
Bulls can only escape a loss on December 3 by raising Bitcoin’s price beyond $58,000, which is only 2% higher than the current $56,900. Bears might apply pressure and attempt to profit up to $175 million if Bitcoin price continues below $56,000 if the present short-term bearish attitude persists.
Currently, data from the options markets favor put (sell) options somewhat, allowing for more FUD and unexpected market collapses.
The author’s thoughts and opinions are purely his or her own and do not necessarily represent those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.
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