Deribit sees record options interest as November expiry nears

Deribit options markets are preparing for the November options expiry with record open interest. The options market is also showing signs of the year-end sentiment based on options positions. 

Deribit noted peak open interest ahead of its November options expiry event. The exchange showed increased open interest as BTC became more volatile, with more active hedging against a downturn. 

Deribit options expanded to a record in terms of total contract count, with over $43B in notional open interest and $1.5B in daily trading volumes. | Source: Deribit.

The rush to set up new positions happened in the last week, during the BTC downturn to the $80,000 range. The first signs of recovery led to a spike in open interest, signaling a potential short-term recovery.

The recent open interest reached an absolute record count of contracts, with $43B in nominal open interest. Nominal valuations of the contracts are still below their peak, as the BTC price struggles to recover. 

Deribit volumes also rose to $1.5B, adding 22% in the past 24 hours, of which $1.3B were focused on BTC options trading. Options trading expanded on Deribit and other platforms, as BTC volatility returned to a six-month high and traders searched for protection against a shift in price levels. Options also offered protections against the riskier bets of perpetual futures, which are often liquidated by sudden price moves. 

BTC options traders expect rally above $100,000

Options traders are signaling confidence in recovery only at levels above $100,000. Currently, BTC broke above $91,000 and a bullish scenario is seen as possible after a recovery to $95,000. 

However, put options are still dominant for prices below $100K. Traders have also placed protections at the levels of $85,000 to $80,000, similar to last week’s positioning. 

For the past few weeks, BTC options expired with a dominance of put positions, as traders started hedging against a downturn at levels below $110,000. 

BTC prepares for Friday’s options expiry

A total of $13.74B in monthly options is expiring on November 28, down from October’s $17B options expiry. 

The options are expiring with a maximum pain of $100,000 per BTC, as the current price is still below that level. Friday’s options expiry events are often followed by weekend volatility, potentially allowing BTC to trade at a lower range. 

For now, there is little chance that traders would push BTC back to $100,000 and cause maximum pain. Currently, around 22% of options are on the money, and 77% in the money. 

The upcoming options expiry shows BTC predictions are still at a crossroad. Options traders are protecting from a further downside, while also anticipating an expansion above $100K, with positions accumulating in the $102,000-$105,000 range. 

ETH expects $1.73B in expiring options, again with a predominance of call options. ETH maximum pain is at $3,400, while the asset traded at $3,007.12. 

BTC still trades under extreme fear, with the index at 22 points, a slight recovery from the recent value of 15 points. BTC open interest recovered to $30.8B, signaling a slight return to more confidence.

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