Ethereum Call Options Concentrated at $4000 on Deribit
Date: 2024-02-10 Author: Dima Zakharov Categories: BLOCKCHAIN
Ethereum Call Options Concentration
Deribit, a leading cryptocurrency derivatives exchange, has reported a noteworthy cluster of call options on Ethereum with a June expiry date centered around a $4000 strike price. The commercial director of Deribit, Luuk Strijers, shared graphs with The Block illustrating this concentration.
Market Interest and Speculation
The concentration at the $4000 strike price suggests market participants' heightened interest or anticipation of Ethereum's price surpassing $4000 by the options' expiry date. This concentration may reflect a consensus or speculation regarding Ethereum's potential future price movements.
Anticipation of Ethereum ETF Approval
Remarkably, this concentration coincides with the potential approval of a spot Ethereum ETF by the end of May. Traders seem to be adjusting their Ethereum options contracts in light of the May 23 deadline for final decisions on Ethereum spot ETF applications.
Derivative Market Dynamics
However, it's premature to conclude whether traders anticipate price increases post-ETF approval. Strijers noted that June's deviation is higher than April's, indicating more expensive calls, but it's challenging to directly link this to ETF news or expected correlations with Bitcoin's halving.
Understanding Options
Options are derivative contracts providing traders the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specified date. A call option grants the right to buy, while a put option grants the right to sell. Traders buying put options typically adopt a bearish stance on the market, whereas buyers of call options are bullish.
According to The Block’s Price Page, Ethereum's price surged over 2% on Friday, reaching $2470 at 5:30 AM Eastern Time.
