$ 18 billion in Bitcoin options set to expire – here is something to be expected

Analysts called the fictional decline of Bitcoin Options of today $ 18 billion ‘record setting’, and added that the volatility that comes from this can be delayed.

That could be welcomed news for crypto investors after a rough commercial week had the prices tumbled across the board, with Bitcoin Hanging on a slight profit for the month of September and the rest of the cryptomarkt already in red.

“Historically precedent suggests that the large expiration date often suppresses the volatility that leads to the closure and then results in a clearer directoral movement in the 24-72 hours that follow,” said BitFinex analysts Decrypt.

That expected volatility has users on countless, a forecast market owned by Decrypt Multi -company Dastan, who thinks Bitcoin, will see more red than green candles at the weekend, which means lower prices in the daily charts. The bears focus the bulls closely at the time of writing, 51% to 49%.

Options are derivative contracts that give traders the right – but not the obligation – to buy or sell Bitcoin at a fixed price, the exercise price, on or before a certain date. Calling bets at higher prices and wells are bets that the price will be lower. It is a popular way for traders to cover risks.

Most crypto options expire on fixed monthly cycles, usually the last Friday of the month. And when the fictional value of options ends, extends to dozens of billions of dollars – as it has – it can create some volatility in markets, because traders hurry to re -balance their risk.

Looking ahead to October, the Bitfinex analysts said there is still a lot of risk of the option market. At the time of writing, crypto data aggregator Coinglass estimates that there is $ 78.9 billion in open interest in Bitcoin contracts.

On Deribit, the largest Bitcoin options trade platform and recently taken over by Coinbase, more than $ 8 billion in open interest is already planned to expire on October 31.

“Totally aggregated BTC options open interest remains at very increased levels,” said the Bitfinex analysts Decrypt. “There has been a considerable structure in conversations in October, concentrated in the corridor from $ 115,000 to $ 125,000.”

The analysts also noted that the Bitcoin optics markets show signs of ‘long convexity’. That means that traders who have bought those long contracts will see enormous profit when BTC experiences a sharp rally.

But the dealers who have sold those options are positioned in ways that can force them to cover aggressively if it happens. That could make the dealers buy BTC while it rises and sells while it falls, which would exaggerate Intraday swings and create a lot of heel on the option market.

If that happens, they added, it can suppress “upward movement until streams or spot-powered factors break the structure.”