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97 % of 8.3 billion dollars in bitcoin options, a value of no value at $ 102,000 BTC.
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The short cover exceeding $ 105,000 can lead to a high price of bitcoin to its highest level.
Bitcoin (BTC) rose above $ 101,000 on May 8, reaching its highest level in more than three months. The BTC price per day increased by 4.6 % to $ 205 million in the ranking of Haboodian futures jobs and eroded the value of almost each (sale) option. Traders are now wondering whether Bitcoin is ready to break its highest level ever in the short term.
The total open interest of the Bitcoin option (sale) for the next three months is $ 8.3 billion, but 97 % of that interest has been placed less than $ 101,000 and its validity is likely to end. However, this does not mean that all Put options were betting on the negative side of Bitcoin, because some may have sold these tools and benefit from price gains.
Among the largest options strategies circulated in Deribit “Bull PUT”, which includes selling PUT option with another one -time purchase at a lower strike price, determining both the maximum profit and the risks of the negative side. For example, a trader who aims to profit may sell high prices to put $ 100,000 and buy 95,000 dollars.
Current currency traders are known for their exaggerated optimism, and this is reflected in the leading strategies in the market of Deribit options, such as “the spread of the bull call” and “the Qatari deployment”. Either way, traders expect bitcoin prices at the end of them equal or higher than the circulating options.
100,000 dollars boost bitcoin budget options, but may resist short pants
If Bitcoin maintains $ 100,000, most of the upscale strategies will lead to positive results at the end of May and June options, giving traders additional incentives to support the bullish momentum. However, there is a possibility that sellers (short pants) using futures markets will exercise their influence to prevent new bitcoin at all.
Related to: Coinbase for Deribit options trading platform for $ 2.9 billion
The total open interest on Bitcoin’s futures futures is $ 69 billion, indicating a large demand for short jobs (sale). At the same time, the higher prices may be forced to close their sites. However, the “short coverage” effect is greatly steadfast in the entire hedge situations, which means that these merchants are not particularly sensitive to bitcoin price movements.
For example, one can buy instant bitcoin jobs using margin or boxes circulating on the stock exchange (ETFS) with the sale of its equivalent in the future of BTC at the same time. This strategy is known as “Carry Trade”, and therefore profit comes regardless of price fluctuations, as futures for the month of Bitcoin with the value of compensation for the longer settlement period.
Bitcoin’s future contract has been less than 8 % over the past three months, so “Carry Trade” incentives are limited. Thus, a form of “short coverage” is likely to occur if bitcoin rises to above 105,000 dollars, which greatly improves the possibilities of a new rise over the next two months.
This article is intended for general information purposes and does not aim to be and should not be considered legal or investment advice. The opinions, ideas and opinions expressed here are alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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