This Friday, February 26, 63,100 option contracts on BTC will expire, according to skew.
Friday can be a big day
According to the information, published on Twitter by the analytical resource skew, this Friday, February 26, Bitcoin contracts in the amount of 63,100 BTC are expected to expire in the options market.
On this day, contracts with a strike price of $ 56,000 for about $ 160 million will expire. According to the above chart, the maximum open interest rate (4,400) falls on BTC contracts with a strike price of $ 48,000.
Also, according to skew data, the total open interest in bitcoin is about $ 3 billion. At the same time, you can see on the chart that this value doubled from December to January.
$ 3bln + notional in total pic.twitter.com/XhCaZBlGos
– skew (@skewdotcom) February 22, 2021
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The analysis of the above statistics also shows that, despite a slight drawdown in January 2021, open interest grew again, reaching $ 10 billion by February 11. As of February 21, this figure was already about $ 13 billion.
What does this mean for the market
Open Interest is the total number of open-ended Bitcoin contracts for various derivatives such as options and futures. Directly open interest in options does not directly say anything about the future price dynamics of the underlying asset, however, industry participants use it as an indicator of general speculative activity and liquidity in the market.
In addition, high open interest near the expiration date of options often leads to increased volatility in the spot market as traders actively adjust their positions ahead of the expiration date.
In June 2020, a similar situation was already observed. Then, in one day, options for 100,000 BTC should have expired against the background of an explosive growth in open interest.
Deribit remains a leader
Deribit is again the market leader among cryptocurrency exchanges in the Bitcoin options segment. This exchange has long held the leading position in terms of trading volume for BTC contracts.
For the first time, the open interest indicator for BTC options on Deribit exceeded an important psychological barrier of $ 1 billion in the spring of 2020. As of February 19, it amounted to $ 1.7 billion. In general, according to statistics, open interest regularly and everywhere exceeded the $ 1.5 billion mark.
Bitcoin options gained popularity towards the end of 2020, although Bakkt launched trading in them back in December 2019. In January 2020, the Chicago Mercantile Exchange (CME) followed Bakkt’s example, and in April 2020, Binance also launched its own futures and options trading platform.
Meanwhile, compared to Deribit, the open interest rate on CME looks like a drop in the ocean. A similar value for Bakkt is zero, and Binance has stopped offering a product like options.
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