Deribit nears expiry of $3.6 billion in crypto options contracts amid 'rock bottom' volatility regime

Companies • May 24, 2023, 1:51PM EDT

Quick Take

Thousands of bitcoin and ethereum option contracts are set to expire on Friday.
“Implied volume remains at rock bottom level,” according to Deribit.

While $3.6 billion worth of bitcoin and ethereum option contracts are set to expire this Friday on Deribit, the impact could be minimal as the market is enjoying one of its lowest levels of volatility all year.

About 85,000 bitcoin options contracts valued at $2.3 billion are set to expire on Friday. With a put call ratio of 0.38, there are likely more than two and half more calls outstanding than puts, according to Luuk Strijers, the chief commercial officer of the crypto futures and options exchange.

There are roughly 700,000 contracts for ethereum options valued at $1.3 billion that are also set to expire, he added.

The dollar amount of the options set to expire is sizable, but that doesn't mean the market has a reason to panic, said Strijers.

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"Implied volume remains at rock bottom level with DVOL trading at 50 for bitcoin and ethereum and shorter-dated even lower but climbing slightly," he said. "Bitcoin and ethereum levels are the same which is historically rare."

"We saw a similar rock bottom IV situation in January this year followed by a big spike afterwards," Strijers added.

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Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].

RT Watson is a senior reporter at The Block who covers a wide array of topics including U.S.-based companies, blockchain gaming and NFTs. Formerly covered entertainment at The Wall Street Journal, where he wrote about Disney, Netflix, Warner Bros. and the creator economy while focusing primarily on technological disruption across media. Previous to that he covered corporate, economic and political news in Brazil while at Bloomberg. RT has interviewed a diverse cast of characters including CEOs, media moguls, top influencers, politicians, blue-collar workers, drug traffickers and convicted criminals. Holds a master's degree in Digital Sociology.