On November 13, a total of $ 525 million in Bitcoin (BTC) options outstanding interest expires. This is comparable to last week $ 470 million in outstanding interest also expired. This produces a somewhat unusual activity as most of the volume is through monthly and quarterly options.
On November 5 (last Friday), the outstanding interest for put (sell) options was 30% higher than for call (buy) options. Deribit exchange has $ 431 million of interest outstanding for this Friday’s close and Bit.com has $ 72 million.
Before coming to any quick conclusions about whether this figure is bullish or bearish, it’s important to take a more detailed look to measure potential buy and sell pressures at maturity.
For example, a holder of an $ 18,000 call option will not have much profit from pushing the Bitcoin price up to $ 16,500 with less than 32 hours to expiration. These options are already considered worthless by the market. The same can be said for a put (sell) option up to $ 14,000.
So by excluding call options above USD 16,700 and put options below USD 14,400, traders can get a more realistic view of current market conditions.
Deribit exchange has 5,915 BTC call options ranging from $ 14,000 to $ 15,750. Bit.com has 1,050 BTC and OKEx currently has 490 BTC. Therefore, there is immediately $ 117 million of outstanding interest in support of current levels.
Meanwhile, put options, ranging from $ 15,250 to $ 16,500, are 2,130 BTC at Deribit, followed by 860 BTC at Bit.com, plus another 100 BTC at OKEx. So the immediate pressure on the sell side is $ 48 million in interest outstanding from put options.
The reason behind this difference is that most put options have been written off and have no market value. This move excludes 84% of the $ 298 million open interest on put options.
Therefore, when only analyzing the option closer to the market level, there is a significant $ 69 million imbalance in favor of the buy side. Like last week, there were some major bearish trades likely related to US elections.
Regardless of whether the market has enough strength to break the USD 16,000 resistance, those short-term options are currently supporting USD 15,500 and higher prices.
OKEx, Bit.com and Deribit weekly contracts expire on November 13 at 8:00 am (UTC).
The views and opinions expressed here are solely those of the author and do not necessarily reflect Cointelegraph’s opinion. Every investment and trade move carries risks. You should do your own research when making a decision.