Options Expiry and Maximum Pain Points of BTC and ETH
On February 23, according to Deribit data, option contracts with more than 1.85 billion US dollars BTC and 870 million US dollars ETH will expire for delivery …
On February 23, according to Deribit data, option contracts with more than 1.85 billion US dollars BTC and 870 million US dollars ETH will expire for delivery on February 24. The maximum pain point price of BTC is $22000; The maximum pain point price of ETH is $1600.
Data: US $1.85 billion BTC and US $870 million ETH option contracts will expire and be delivered on February 24
Interpretation of the news:
According to Deribit data, option contracts worth over 1.85 billion US dollars in BTC, and 870 million US dollars in ETH will expire for delivery on February 24. This option expiry event is significant as it may impact the price of both BTC and ETH in the short term.
Option contracts are a popular financial instrument that investors use to speculate on the future price of various assets, including cryptocurrencies. An option contract gives the holder the right (but not the obligation) to buy or sell an underlying asset at a specified price within a specified timeframe. Option sellers earn a premium from the purchaser in exchange for that right.
As these derivatives are settled in cryptocurrency, the expiration of option contracts may result in the transfer of a significant number of BTC and ETH to option buyers. As the expiration time approaches, sellers may have to acquire additional cryptocurrencies to meet these obligations. This scenario may result in increased demand for cryptocurrencies and influence their prices.
Deribit data suggest that the maximum pain point price of BTC is $22000, and the maximum pain point price of ETH is $1600. Maximum pain points refer to the price level at which the maximum number of options contracts expire worthless for the sellers. Options traders use this metric to determine the potential resistance zones for the underlying asset’s price.
If the actual price of BTC and ETH remains above their respective maximum pain points, it could lead to significant losses for the option sellers. In contrast, if the actual price drops below these levels, option buyers may incur losses. Therefore, option sellers may try to influence the market price to ensure that the actual price remains within these levels by buying or selling cryptocurrencies.
In conclusion, the expiration of option contracts can influence the short-term price of BTC and ETH. Investors should keep an eye on the actual price levels of these cryptocurrencies and their maximum pain points to determine potential resistance and support levels. The cryptocurrency market is highly volatile, and there is no guarantee that option sellers will influence the market in their favor.
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