$1 Billion in Bitcoin Options Expire Friday.

[kolbalish]

Many of the Bitcoin options contracts set to expire are between $11,000 and $12,000—well above BTC's current price.

Almost a billion dollars worth of Bitcoin options contracts, a little under half in existence, are set to expire on Friday, per data from Skew analytics. And Ethereum isn’t far behind. About $450 million worth of ETH options contracts expire on the same day.

This could potentially introduce a whole lot of crypto back into the market as traders look to dump or HODL. Here’s what to expect.

What is an options contract?
First things first: What are we talking about?

An options contract lets people buy Bitcoin in the future at a price agreed to beforehand. So, if you entered into an options contract when Bitcoin was worth about $4,000 following the mid-March crash to receive your Bitcoin at that very price come the final Friday of September, that would have been a smart decision (or lucky bet), as Bitcoin has more than doubled in price.

This is also the premise of a Bitcoin futures contract. But where the two differ is that a Bitcoin futures contract creates a contractual obligation to buy that Bitcoin upon the contract’s expiry. With options, traders are not contractually obliged to buy up the Bitcoin but simply have the option to do so.

Back to business
Bitcoin options contracts are big business. On Derebit, the largest platform for options contracts by volume, traders exchange about $57 million worth of options contracts each day. And as of yesterday, there are about $2 billion worth of Bitcoin options contracts yet to expire. That means that about half will expire come Friday. For Ethereum, it’s a similar picture.

So, what will happen? According to a research report from Coin Metrics, for ETH, “this event will likely add additional volatility to price action throughout the week, as traders look to hedge exposure on these positions, work out of them, or possibly take action in the spot market in anticipation.”


For Bitcoin, much the same, Charles Bovaird, a researcher at crypto research firm Quantum Economics, told Decrypt. “As these contracts approach their expiration date, volatility could spike as investors opt to buy, sell or let their contracts expire.”

Dan Gunsberg, CEO and cofounder of crypto trading platform Hxro, said that a good chunk of the options contracts are between $11,000 and $12,000—far above Bitcoin’s current price of $10,310.

Gunsberg told Decrypt: “The market is effectively giving you 20:1 odds right now that the price will trade at or above $11,000 by the 25th of September.” Hitting $11,000 would be no great explosion; Bitcoin’s price was just above $11,000 on Saturday. But any higher than usual “could set off some fireworks.” Still, he said, “This is crypto, so you never know.”

Bovaird added: “If a large number of contract holders use this ability to purchase bitcoin before the contracts expire, that would place upward pressure on the cryptocurrency's price. Likewise, if contract holders used their options to sell, it would place downward pressure on bitcoin prices,” he said.

“However, it could also have very little impact at all,” he said. “If the options contracts expire without being exercised (used), then they won't place upward or downward price pressure on bitcoin.”

Reference - https://decrypt.co/42773/billion-bitcoin-options-expire-friday-heres-what-it-means?amp=1

[1715416466]

1715416466

[1715416466]

1715416466

[Poker Player]

It's funny beause at first it seems that it could have an impact on bitcoin price but then it says it could make the price go up, or down or " could also have very little impact at all".

LOL

So, we have no idea where bitcoin price it's going to go, at least in the short-term.

[leea-1334]

Ah all the while I thought it would be futures that were expiring. Seems like this is a record, so what should we expect? Dump to 9k? I mean that should be the minimum to expect a 10% drop right? Or are we talking for the moment a dip temporarily as you suggest? Not that this affects me anyhow,,, buy everytime for me;)

[adaseb]

Ah all the while I thought it would be futures that were expiring. Seems like this is a record, so what should we expect? Dump to 9k? I mean that should be the minimum to expect a 10% drop right? Or are we talking for the moment a dip temporarily as you suggest? Not that this affects me anyhow,,, buy everytime for me;)

Generally the way it works is market makers sometimes can move price to a "max pain" area where they generate the most profit by moving the spot price by buying or selling. This happens more often in stocks. If some market maker wrote $10,000,000 worth of contracts that expire at $11000 they would do their best to protect the $11K resistance.

However keep in kind that this knowledge only works IF price is very close to the strike price and expiry date. Since $12K is far away there is no market maker that is going to try and push price that high in such little time. Maybe if the strike price was $10K it would be of move significance. So say 1 hour before expiry there is a large crash below $10K and then it starts to move up, means go long because the market maker is closing the large short they opened earlier to push price down.

[Bezobraznike]

It's funny beause at first it seems that it could have an impact on bitcoin price but then it says it could make the price go up, or down or " could also have very little impact at all".

LOL

So, we have no idea where bitcoin price it's going to go, at least in the short-term.

   Poker Player you are right, we have no idea where the Bitcoin price is heading, and after reading this article I think the author don't
know the answer on this question either. Nobody knows what we can expect because this is all new for many of us, we had many
similar situation in the past, when we face with something new, and while some are positive others are very negative, and have moments
when people say exactly that, it could go up or down, or to stay where it is, that's funny! Like anything can happen, or nothing! In
crypto-market we got used to that.

[cryptomaniac_xxx]

It's funny beause at first it seems that it could have an impact on bitcoin price but then it says it could make the price go up, or down or " could also have very little impact at all".

LOL

So, we have no idea where bitcoin price it's going to go, at least in the short-term.

   Poker Player you are right, we have no idea where the Bitcoin price is heading, and after reading this article I think the author don't
know the answer on this question either. Nobody knows what we can expect because this is all new for many of us, we had many
similar situation in the past, when we face with something new, and while some are positive others are very negative, and have moments
when people say exactly that, it could go up or down, or to stay where it is, that's funny! Like anything can happen, or nothing! In
crypto-market we got used to that.

If we are going to look at the market landscape today, we might say that it can an awful effect already. Similarly to the bitcoin options that expire at the end of August. I think that is even worst because we have seen the price went from as high as $12k to < 5 digits. So it has affected has already, for where the price is heading though, we can't say, maybe we can see $9'isk again.

[el kaka22]

Are we really sure about this number? I do not have the data right now and I can't check it so I can't really say if they are right or wrong but if it is really true, that will change a lot of stuff. I mean we can't just take someone's word for it, just because they said 1 billion expires on this Friday that means it will, maybe they are lying who knows, but if they are telling the truth, there will be a lot of bitcoin on the market. That is not good, even if most of them wants to hold it, some of them will want to sell it finally and that will result with a big drop, which would create a panic which will drop it even further down.

Hopefully it won't happen and things will not ripple down too quickly, if that happens recovery will be a lot harder and we may not see $12k for another couple months.

[stompix]

“However, it could also have very little impact at all,” he said.

It's like writing down a whole thesis, finding in it arguments for every move, analyzing the whole environment and in the end, of course, all those arguments I've presented can be false and the entire thing I've spent days trying to put in words will look just like something pulled out of my you know what...Seriously, authors like this, who start by throwing around numbers and data and explaining how this can influence that and how traders can react, how they will hedge acting like they know it all only to end up with a stupid disclaimer so that people don't point the finger at them should simply stop writing!

We already know that the price can go up, down, sideways, stay the same, change a bit, change a bit more, skyrocket or collapse, no need to waste oxygen for yet another analysis.

Are we really sure about this number? I do not have the data right now and I can't check it so I can't really say if they are right or wrong but if it is really true, that will change a lot of stuff. I mean we can't just take someone's word for it, just because they said 1 billion expires on this Friday that means it will, maybe they are lying who knows, but if they are telling the truth, there will be a lot of bitcoin on the market.

Those are bitcoin options, not real bitcoins, and no, nobody is going to dump bitcoins on the market because of that.
As for the numbers, here is derebit.

[BrewMaster]

every now and then there are some options that are expiring with different total amounts (by the way you forgot to mention the source for that $1 billion amount which is weird) but the market never cares. there are times that some people panic and some other times that they don't so we don't even see that small panic move. but one thing is always certain, we can't predict what the next market move is going to be specially at times like this.

[Yaunfitda]

every now and then there are some options that are expiring with different total amounts (by the way you forgot to mention the source for that $1 billion amount which is weird) but the market never cares. there are times that some people panic and some other times that they don't so we don't even see that small panic move. but one thing is always certain, we can't predict what the next market move is going to be specially at times like this.

We have like every 3 months bitcoin options expiry right? And in the past it wasn't even sensationalized or at least it was not given any attention so it doesn't have any impact at the market at all. Although this is huge amount $1 billion, so maybe the market will just swallow this kind of news just like in the past and the effect will not be felt at all. So I don't see any panic here and it couldn't make any difference at all.

[adaseb]

every now and then there are some options that are expiring with different total amounts (by the way you forgot to mention the source for that $1 billion amount which is weird) but the market never cares. there are times that some people panic and some other times that they don't so we don't even see that small panic move. but one thing is always certain, we can't predict what the next market move is going to be specially at times like this.

We have like every 3 months bitcoin options expiry right? And in the past it wasn't even sensationalized or at least it was not given any attention so it doesn't have any impact at the market at all. Although this is huge amount $1 billion, so maybe the market will just swallow this kind of news just like in the past and the effect will not be felt at all. So I don't see any panic here and it couldn't make any difference at all.

The only type of options expiry data that have ever helped me in the past was with forex option expiry analysis. There was a website called forexlive and they posted any large forex options that expire. They had strong options such as touch options so if it just touched the number before expiry it would get executed.

I would use this info to my knowledge and if near expiry I saw something strange then I would maybe make a trade off it. I remember once right before expiry the EURUSD pair was going down about 9 mins to go. It had a large decline and I assumed "What if someone is pushing it down to trigger the option" so I waited until expiry and then to my surprise it started to go up almost instantely at the dot. So I joined the trade and made some decent money with little drawdown.

I am sure I wasn't the only trader that paid attention to the option data and profited off it. However out of 100 large option expiry's there was maybe 5 that actually worked out the rest did nothing .

[STT]

Those are bitcoin options, not real bitcoins, and no, nobody is going to dump bitcoins on the market because of that.

Theres the small possibility it can become profitable to buy the underlying commodity in order to return an option to profitable expiry.   Not sure how often it happens but probably there is people trying to calculate the chances of such a strategy working, call it feedback response I guess.   The cart sometimes leads the donkey, not usually but I can imagine people buying up BTC on exchanges especially if order depth or volume were low and price moved more easily then they make a profit on their old cheap options now in the money.
   It would be a short term phenomena but we're familiar with various news events leading the price, buy the rumor sell the news is fairly regular occurrence.

[atjiat]

It seems to me that if the BTC options market is also concentrated on short-term contracts in the near future, then we can predict a decrease in interest in options, especially given the fact that September contracts bring in $ 900 million less than in July this year and the trend seems to continue ...

[exstasie]

Those are bitcoin options, not real bitcoins, and no, nobody is going to dump bitcoins on the market because of that.

Theres the small possibility it can become profitable to buy the underlying commodity in order to return an option to profitable expiry.   Not sure how often it happens but probably there is people trying to calculate the chances of such a strategy working, call it feedback response I guess.

Yep. It's a dangerous strategy, especially as the derivatives market becomes increasingly liquid.

Back in 2014-2016, Bitcoin traders used to watch Okcoin and BitVC (Huobi) futures expiration like a hawk. There were lots of shenanigans back then with whales trying to push around spot prices and defend positions near expiration. Weekly expiration was generally the most volatile time of the week. I remember it being somewhat frustrating because my location meant Okcoin weekly contract expiration happened in the middle of the night at like 2 or 3am. I still have flashbacks of my Bitcoinwisdom alarms going off in the middle of the night. The importance of all this died down as Bitmex perpetual swaps began dominating the derivatives space in 2016.

[thecodebear]

Sooo friday passed. Nothing happened. This options expiration was a big nothing.

[buwaytress]

Sooo friday passed. Nothing happened. This options expiration was a big nothing.

I know, right. I was just saying yesterday, putting out my invoices early for the month, I was hoping all of this hype would translate to some kind of crash or mini dip at least come America wakey time. But ho hum nothing happened. And Bitcoin even showed some signs of rallying now so when I get paid, it'll actually be near this top.

Boring. Next, please.

[Poker Player]

Sooo friday passed. Nothing happened. This options expiration was a big nothing.

The media writes articles to attract attention and cause emotions, so you read an article like that and the first thing you think is: will the price of bitcoin go down? will it go up?

If you read it right, it didn't say anything.

It's funny beause at first it seems that it could have an impact on bitcoin price but then it says it could make the price go up, or down or " could also have very little impact at all".

LOL

So, we have no idea where bitcoin price it's going to go, at least in the short-term.

[davis196]

Dan Gunsberg, CEO and cofounder of crypto trading platform Hxro, said that a good chunk of the options contracts are between $11,000 and $12,000—far above Bitcoin’s current price of $10,310.

If the majority of the BTC option contract are put options,they will be "in the money" ,which means that the option owners will exercise them and sell BTC at the fixed option price between 11k and 12K USD and make some small profits.
On the other hand,if the majority of option contracts are call options,they will be "out of the money",which means that the option holders can buy BTC at a price between 11K and 12K USD,which is above the current BTC price,so they might choose to simply not exercise the call options.
Anyway,I don't think that there will be any impact over the Bitcoin market price.

[Spaffin]

To date, the cryptocurrency market indicators have turned green and I believe that it was not in vain that analysts predicted additional volatility in the weekly price movement after the expiration of the Options. But you also need to take into account that traders will tend to hedge the risks on these positions or take measures in the spot market and on this basis is still quite unpredictable.

[Yaunfitda]

Sooo friday passed. Nothing happened. This options expiration was a big nothing.

I know, right. I was just saying yesterday, putting out my invoices early for the month, I was hoping all of this hype would translate to some kind of crash or mini dip at least come America wakey time. But ho hum nothing happened. And Bitcoin even showed some signs of rallying now so when I get paid, it'll actually be near this top.

Boring. Next, please.

Yes, as I have said before, this is not the first time, so we should get used to it. Bitcoin rebounded already, pushing for $11k after the expiration so yeah, we can say by now that there is no significant effect except for those people who wanted it to make it some noise, so it's just another day for bitcoin traders. No dump happened and on the contrary it bounce nicely, no $9k, sorry for those who are expecting it.