Data from the Deribit derivatives exchange shows that the number of open calls versus puts on Ethereum options open interest is increasing ahead of their expiration date in late January. This means many investors expect prices of digital assets to rise in early 2024, one analyst said.
“If you look at Ether expirations at the end of the year, the put-call ratio is 0.44, which means a ratio of 4.4 puts for every 10 calls. However, in January 2024, the ratio is 0.19, meaning 2 puts for every 10 calls,” Deribit Chief Commercial Officer Luuk Strijer told The Block:
A put-to-call option ratio less than 1 means call volume exceeds put volume, indicating bullish sentiment in the market. Traders who buy call options are implicitly assumed to be bullish on the market, while put buyers are assumed to be bearish. Deribit’s Ethereum put-call ratio today is 0.35, according to The Block’s data dashboard.
derived data It also shows that there are more than twice as many call options as put options ahead of the December 29th expiration date. Of the approximately 974,000 call options outstanding at month-end expiration, the largest group are those with a strike price of $2,500. This means that many derivatives traders are betting on the next price. ETH
-0.54%
This level will be surpassed by the end of December.
Ether is up more than 1% in the last 24 hours and was trading at $2,348 at 12:15 PM ET.
Ethereum options open interest increases
Ether options open interest has increased significantly ahead of the upcoming month-end, quarter, and year expiration date on December 29. “The December maturity date is currently the largest maturity date for Deribit,” Strijers said.
Deribit Ethereum Options Open Interest
“Of the current total $7 billion notional open interest in Ether options, $3.3 billion expires on December 29, or nearly 50%,” Strijers added.
Increasing open interest means new funds are entering the market, indicating increased participation and potential liquidity. This is also a sign of an influx of sophisticated traders into the cryptocurrency market and better price discovery.
An option is a derivative contract that gives a trader 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 grants the right to buy, and a put option grants the right to sell.
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