Today could be a seismic day for crypto as options to the tune of $8.7B dollars in BTC and ETH are set to expire. So let’s put this in layman terms, option expiration is an indication of greater volatility in the market as it leads to either more buying or selling to cover the options. Options are financial contracts where traders bet on BTC/ETH price moves (calls for upside, puts for downside) by a set “strike” price before expiration. Typically options have an expiration but in some cases options can be held for years assuming the assets are liquid to underpin them. Bill Gates famously placed a short option of 400M on Tesla stock, which he still holds accounting to around $10B – $15B in losses if he closed today.
So whether it’s win or lose for those options expiring it will likely result in volatility in the market as big players hedge or unwind positions. So keep your eyes on the ticker dear reader!
