An Increase in Bitcoin Options Puts Could Signal a Bearish Outlook
An increase in the number of outstanding puts compared to calls in bitcoin options open interest could be a bearish omen ahead of Friday’s expiry, according to Deribit Chief Commercial Officer Luuk Strijers. The put-call ratio for bitcoin options currently stands at 0.44, but for tomorrow’s expiry, the ratio adjusts to 0.52, indicating a higher number of puts compared to calls. This suggests a bearish sentiment for this month’s bitcoin options expiry. Strijers explains that investors are using puts to hedge against short-term downside, while still seeing longer-term potential upside.
Ether Options Skew Points to a Mildly Bearish Outlook
Strijers also notes that the call-put options skew for longer-term 30- and 60-day ether options remains slightly negative but close to zero. This indicates that puts are more expensive relative to calls, signaling a mildly bearish outlook for these longer-dated expiries.
Understanding Options and Their Implications
Options are derivative contracts that give traders the right but not the obligation to buy or sell an underlying asset at a predetermined price on or before a specific date. A call option represents a bullish position, allowing the right to buy, while a put option indicates a bearish position and offers the right to sell.
Hot Take: Bearish Sentiment Looms Ahead of Bitcoin Options Expiry
An increase in outstanding bitcoin put options compared to calls suggests a bearish sentiment for this month’s options expiry. While investors use puts to hedge against short-term downside, they still see long-term potential upside. Additionally, the mildly negative skew in ether options indicates a slightly bearish outlook for longer-dated expiries. Understanding options and their implications is crucial for traders navigating the cryptocurrency market.
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