Record $6.5B Bitcoin options open interest follows BTC all-time high

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Bitcoin options open interest reached a record-high $6.5 billion as investors continue to increase their optimistic long-term bets.

The open interest on Bitcoin (BTC) options contracts has reached a new all-time high at $6.5 billion on Dec. 17. That figure represents a three-fold increase from 90 days ago and is proof that the market has grown significantly in the past 6-months.

Bitcoin options total open interest. Source:

Investors must keep in mind that even though a $6.5 billion open interest is an impressive number, it doesn’t necessarily mean that professional investors are bullish or bearish.

Call options provide buyers with an opportunity to leverage without running the risk of liquidation. Meanwhile, put options are an excellent way to hedge against a potential future sell-off. Thus, both add to the total open interest seen in the current figure.

A more interesting fact to analyze is the options profile set to expire over the next 30 days completely differs from longer-term ones. Bitcoin’s 63% bull run since November certainly contributed to this distortion, as $22,000 and higher strikes were not frequent.

Therefore, such a sizeable open interest near the $16,000 strike can be explained by pre-rally market levels.

Deribit short-term BTC options open interest by strike. Source:

Notice how after the recent rally, a decent volume has gone through $24,000 and $28,000, totaling 14,800 BTC contracts. Unlike the ultra-bullish call options above $32,000, these options are not cheap.

This means someone effectively paid up $1,200 for the opportunity to acquire Bitcoin for $24,000 on Dec. 25, less than ten days from the expiry. For a comparison, that’s ten times more than the $32,000 call option traded.

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Although it’s still early to understand how professional traders are positioned for Friday’s Dec. 25 expiry, the premiums paid on these options seem excessive for such a short period.

Longer-term options are even more bullish

A very different pattern emerges when focusing exclusively on longer than 30-day expiries that favor ultra-bullish calls. Unlike short-term ones, these aren’t cheap regardless of requiring 70% or higher upside.

Deribit long-term BTC options open interest by strike. Source:

This time around, the $36,000 strike dominates, followed by the incredibly optimistic $52,000 level. Those options require 40% or higher upside to 52,900 BTC contracts, totaling $1.2 billion in open interest.

The largest open interest position for the $36,000 call option stands at the Jan. 29 expiry. Those traded for as high as $690 a piece recently, thus not a cheap gamble available for anyone.

Instead of gauging investors’ optimism by how high call options have been bought, investors should turn to the skew indicator. One should keep in mind that ultra-bullish options are relatively cheap for 40 to 50 days calendar expiries such as Jan. 25.

Skew shows investors are less bullish

When analyzing options, the 30% to 20% delta skew is the single most relevant gauge. This indicator compares call (buy) and put (sell) options side-by-side.

A 10% delta skew indicates that call options are trading at a premium to the more bearish/neutral put options. On the other hand, a negative skew translates to a higher cost of downside protection, indicating bearishness.

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Deribit Bitcoin options 30-20% delta skew. Source:

According to the data shown above, the last time some bearish sentiment emerged was Nov. 26, while BTC crashed 15%, testing the $16,200 level. This was followed by a period of extreme optimism as the 30-20% delta skew surpassed 25.

This indicator is the most substantial evidence a trader interested in derivatives needs to recognize the current sentiment surrounding Bitcoin options. Whenever it surpasses 15, it reflects fear of potential price upside from arbitrage desks and professionals, and as a result is considered bullish.

Therefore, the recent adjustment to 10 from 15 points as Bitcoin reached a new all-time high at $23,888 indicates a healthy market where investors have yet to become overly optimistic.

The views and opinions expressed here are solely those of the author

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