Bitcoin Forum

Hi, I bought a few hundred ETH call options recently on Deribit with an expiry on 25 December 20. I've noticed that very in-the-money positions appear to be not very liquid and there doesn't even seem to be a market for some of them. Suppose I want to close out of my position before expiry, is there an easy way of doing it or is the only option the exchange. For example, suppose I bought 100 call options with a strike of 400 when the price was 350. If the expiry is 25 December, they're currently worth about $5k based on a price today of 500. Is it possible to sell this or do I have to wait for expiry? What are the options and do I have to accept a much lower price. Thanks in advance.

I don't use Deribit (or trade premined coins like Ethereum...) but I do use LedgerX and ITM options can be a bit illiquid there too.

One thing you should do is put in an order on the books--  just because volume isn't on the books doesn't mean that it isn't around and won't take a good deal if you put one out there.  If you're super eager to be out of the position, you'll probably have to take a bit of a haircut:  no one wants to take much risk for only a really tiny profit. (keep in mind, because deribit is cash settled the buyer also takes on risk related to the integrity of the index price)

Does deribit have a chat?  If so, you can nag to see if anyone will take your trade.

Is your intention to roll the proceeds into a different contract?   If so someone who otherwise might not be too eager to by those ITM contracts might be interested in selling a later date or higher strike that you want to buy and might be willing to buy the ITM contracts if it means they can sell a different contract.

Alternatively,  is there some other more liquid position you could trade which would substantially hedge your position achieve your goal?

Finally, if you're talking about a considerable amount of money-- you could try contacting their support.  They might be willing to contact other customers to help you arrange a deal.  (Or, if they have their own trading desk, they may be willing to take the position off your hands).

Hi gmaxwell, many thanks for your response, very helpful indeed. Would you mind explaining how the buyer takes a risk due to index price integrity. Does this mean the price which your profits are determined can be different to the price at the time.