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The put-call ratio for Bitcoin options on Deribit has risen to 1.66 leading up to today’s expiry. Options contracts for Bitcoin and Ether, valued at $10.18 billion, are set to expire.
A put-call ratio above one indicates that more put options than call options are being traded, suggesting that more investors are betting on or hedging against a price decline rather than an increase.
According to Deribit’s end-of-June options data, 107,000 Bitcoin options are expiring with a max pain point of $61,500 and a notional value of $6.6 billion. At the time of writing, Bitcoin is priced at $61,398, approaching the maximum pain point ahead of today’s expiry. This suggests that the Bitcoin price is nearing the level where the most options will expire worthless. Traders might be positioning themselves to benefit from this alignment, potentially leading to reduced volatility and increased market stability around the expiry.
Today marks the quarterly options expiry for both Bitcoin and Ether contracts, with a combined notional value exceeding $10 billion set to expire on Deribit. This significant event represents more than 40% of Deribit’s current open interest.
According to Deribit CEO Luuk Strijers, Friday’s large quarterly expiry could be potentially influenced by a “quadruple witching” and related volatility in U.S. markets. A quadruple witching occurs four times a year, around the end of each quarter, when contracts for index futures, index options, options, and futures all expire simultaneously.
The large volume of contracts expiring can impact spot prices, as the unwinding of positions and the rolling over of contracts can lead to significant price movements. However, the spot price nearing the max pain point might mitigate some of this effect, as the max pain point represents the maximum number of options contracts expiring worthless.
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