• Home
  • Cryptocurrency
    • Bitcoin
    • Ethereum
    • XRP
    • Litecoin
    • Altcoin
    • Cardano
    • Tether
    • DOGE
    • Solano
    • XLM
    • DOT
    • XDC
    • SHIBA
    • BNB
    • Ape
    • HBAR
    • QNT
  • Blockchain
  • Regulation
  • Market
  • Live
    • Prices
    • ICO
  • Meta
    • NFT
  • Technical Analysis
    • XRP
    • BTC
    • XLM
    • ADA
    • TETHER
    • ETC
    • ETH
    • DOGE
    • LTC
  • Exchange
  • Mining
Friday, June 2, 2023
  • Login
  • Register
Coin24h.com
  • Home
  • Cryptocurrency
    • Bitcoin
    • Ethereum
    • XRP
    • Litecoin
    • Altcoin
    • Cardano
    • Tether
    • DOGE
    • Solano
    • XLM
    • DOT
    • XDC
    • SHIBA
    • BNB
    • Ape
    • HBAR
    • QNT
  • Blockchain
  • Regulation
  • Market
  • Live
    • Prices
    • ICO
  • Meta
    • NFT
  • Technical Analysis
    • XRP
    • BTC
    • XLM
    • ADA
    • TETHER
    • ETC
    • ETH
    • DOGE
    • LTC
  • Exchange
  • Mining
No Result
View All Result
  • Home
  • Cryptocurrency
    • Bitcoin
    • Ethereum
    • XRP
    • Litecoin
    • Altcoin
    • Cardano
    • Tether
    • DOGE
    • Solano
    • XLM
    • DOT
    • XDC
    • SHIBA
    • BNB
    • Ape
    • HBAR
    • QNT
  • Blockchain
  • Regulation
  • Market
  • Live
    • Prices
    • ICO
  • Meta
    • NFT
  • Technical Analysis
    • XRP
    • BTC
    • XLM
    • ADA
    • TETHER
    • ETC
    • ETH
    • DOGE
    • LTC
  • Exchange
  • Mining
No Result
View All Result
Coin24h.com
No Result
View All Result
Ledger Nano X - The secure hardware wallet
ADVERTISEMENT

Some Traders Now Taking Bets Ether Will Break $1K by December

11 August 2020
in Market
Reading Time: 5 mins read
A A
0
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter
cryptotrader
ADVERTISEMENT


Cryptohopper
ADVERTISEMENT

Deribit has started listing ether (ETH) options with strikes above $1,000, and some traders are now betting the cryptocurrency will reach that price by year’s end.

Over 3,470 contracts – worth $1.3 million – of ETH 1,120 call options have been traded for December 2020 and March 2021 expiry this month. These trades were executed on the Panama-based Deribit exchange, the world’s largest crypto exchange by options trading volume. It is the first exchange to offer options for strikes above $1,000, which went live on Aug. 1.

Ether options open interest
Source: Genesis Volatility

”Volumes have been decent and open interest [open positions] is over 2,500 contracts already, indicating some traders believe ETH can potentially show a price move of over 180% in five to seven months,” Luuk Strijjers, COO at Deribit, told CoinDesk.

Ether is trading near $390 at press time, representing a 200% gain on a year-to-date basis. The impressive price rally and expectations for continued DeFi-led bull run could be driving the activity in the deep out-of-the-money options.

Read more: Deribit Reports Daily Record $539M of Bitcoin Options Traded, More Than Double Prior High

An option gives owners the right, but not the obligation, to trade an underlying asset at a set price and date. Calls give its owners the right to buy the asset while puts give their owners the right to sell.

Open interest in ether’s options market has exploded this year, increasing 2,585% from $14 million to $376 million, according to data provided by Skew.

ETH options as a forecasting tool

Options market data is widely used to identify support and resistance levels and potential trends in prices. For instance, Kyle Davies, co-founder of Three Arrows Capital, tweeted Monday that $14,000 is a key hurdle for bitcoin, which, if breached, could pave the way for $20,000. That’s because there is notable open interest buildup in options at $14,000 strike and negligible activity in higher strikes.

In ether’s case, however, open interest in strikes above $1,000 is too small to draw any conclusions about the investor bias. At press time, there are 2,541 contracts open at the strike price of $1,120. That’s a meager 0.3% of the total open interest of 878,104 contracts spread across multiple expiries, according to data provided by Deribit.

“I wouldn’t make much of the existing open interest of 2,500 contracts on these strikes. Almost every strike from $40 to $880 has that as minimum interest,” said Vishal Shah, an options trader and founder of Polychain Capital-backed derivatives exchange Alpha5.

This relatively low number of transactions reflects the fact that the options market as a whole sees a low probability that ether will trade at $1,000 or greater by the end of December. The probabilities are calculated with the help of the Black-Scholes formula, which is based on metrics such as call option prices, strike prices, the price of the underlying asset, time left for expiry and the risk-free interest rate.

Read more: Open Interest in Ether Options Jumps to New Record High

Traders use an option’s delta, which measures the sensitivity of the option’s price to changes in the underlying asset’s price, as an estimated probability for a given option to expire in-the-money or make profit on expiry. Call options at $1,120 strikes will expire in the money if the spot prices settle above $1,120 on the day of the expiry. Owners at that strike only see a profit if ether trades above that price plus the cost of the option.

At press time, the delta of the $1,120 call option expiring in December is 0.11. In other words, the probability of ether rising above $1,120 on or before Dec. 25 is 11%. Similarly, delta of the $1,120 March expiry call option is 0.18. Meanwhile, data provider Skew calculates a mere 5% probability of ether trading above $1,000 before New Year’s Day.

Also, the $1,120 call expiring in December has the same probability as the put option at $300 strike. It means the odds of bitcoin ending the year 22% below today’s price is similar to prices ending 187% higher from the current price.

“That tells you something about expectations,” said Shah, adding, “the ETH options market is not big enough to drive the price of the underlying.” Indeed, global options volume of $22.9 million is just 2% of the spot market’s volume of $11.7 billion.

Not just directional plays

Lastly, traders rarely take outright directional bets or naked long positions in deep out-of-the money options like the $1,120 call. “It’s more likely to be a hedge or part of a more elaborate strategy such as volatility or relative value plays,” Denis Vinokourov, head of research at London-based BeQuant, a cryptocurrency exchange & institutional brokerage. told CoinDesk in a Telegram chat.

Nevertheless, open interest buildup, delta and other option market metrics are good indicators of sentiment and become more reliable with the growth in the size of the market.

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.





Source link

Related articles

Tether Market Cap Climbs to All-Time High of $83.2B, Even as Stablecoin Market Sinks

Tether Market Cap Climbs to All-Time High of $83.2B, Even as Stablecoin Market Sinks

1 June 2023
Bitcoin Lingers Under $27K to Continue Its May Sluggishness Amid Inflation Concerns

Bitcoin Lingers Under $27K to Continue Its May Sluggishness Amid Inflation Concerns

1 June 2023
[crypto-donation-box]
Tags: BetsBreakDecemberEtherTraders
Share76Tweet47
Ledger Nano X - The secure hardware wallet
Previous Post

Ethereum reaches new yearly highs; will Bitcoin and Litecoin follow?

Next Post

Altcoin Market Capitalization Breaches Key Resistance Level – BeInCrypto

Related Posts

Tether Market Cap Climbs to All-Time High of $83.2B, Even as Stablecoin Market Sinks

Tether Market Cap Climbs to All-Time High of $83.2B, Even as Stablecoin Market Sinks

1 June 2023
0

USDT has reached a $83.2 billion market capitalization, recovering all its losses since the implosion of blockchain project Terra more...

Bitcoin Lingers Under $27K to Continue Its May Sluggishness Amid Inflation Concerns

Bitcoin Lingers Under $27K to Continue Its May Sluggishness Amid Inflation Concerns

1 June 2023
0

BTC and ether both lost ground in May, the first monthly decline of 2023. LTC and RNDR were among the...

Litecoin Price (LTC) Starts June Strong as Investors Eye August Halving, Uptick in Activity

Litecoin Price (LTC) Starts June Strong as Investors Eye August Halving, Uptick in Activity

1 June 2023
0

Litecoin is a lot cheaper in terms of units compared to bitcoin, which attracts investors looking to position themselves ahead...

CoinDesk Turns 10: 2022 – How Crypto Gods Turn Into Monsters

CoinDesk Turns 10: 2022 – How Crypto Gods Turn Into Monsters

1 June 2023
0

On Nov. 2, 2022, Ian Allison’s revealed the weak balance sheets of the FTX-affiliated trading firm Alameda Research, which started...

Qatar’s Central Bank Didn’t Properly Enforce Its Crypto Ban, Money Laundering Watchdog FATF Says

Qatar’s Central Bank Didn’t Properly Enforce Its Crypto Ban, Money Laundering Watchdog FATF Says

1 June 2023
0

“There are major inconsistencies between Qatar’s risk profile and the type and extent of terrorist financing activity prosecuted and convicted,”...

Load More
Next Post

Altcoin Market Capitalization Breaches Key Resistance Level – BeInCrypto

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

We publish a comprehensive news feed covering all news relevant to the crypto user, covering main industry news, politics and regulation as well as consumer-level “news you can use” (practical stuff), including handy DIY tips, links to useful tools, unbiased reviews and opinions revolving around cryptocurrency. Simple logic and real-world examples are preferred before technical jargon and personal rants.

Categories

  • Altcoin
  • ApeCoin
  • Bitcoin
  • Blockchain
  • BNB
  • Cardano
  • Cryptocurrency
  • DOGE
  • DOT
  • Ethereum
  • HBAR
  • Litecoin
  • Market
  • Meta News
  • Mining
  • NFT
  • QNT
  • Regulation
  • SHIBA
  • Solano
  • Tether
  • Uncategorized
  • XDC
  • XLM
  • XRP

What’s New Here!

  • Mooners and Shakers: Litecoin gains while Bitcoin slips; Binance Australia updates banking situation
  • Tether Market Cap Climbs to All-Time High of $83.2B, Even as Stablecoin Market Sinks
  • Best Crypto to Buy Now 1 June – IOTA, Litecoin, Stellar

Newsletter

  • About Us
  • Privacy Policy
  • Contact Us

© 2022 coin24h.com

No Result
View All Result
  • Home
  • Cryptocurrency
    • Bitcoin
    • Ethereum
    • XRP
    • Litecoin
    • Altcoin
    • Cardano
    • Tether
    • DOGE
    • Solano
    • XLM
    • DOT
    • XDC
    • SHIBA
    • BNB
    • Ape
    • HBAR
    • QNT
  • Blockchain
  • Regulation
  • Market
  • Live
    • Prices
    • ICO
  • Meta
    • NFT
  • Technical Analysis
    • XRP
    • BTC
    • XLM
    • ADA
    • TETHER
    • ETC
    • ETH
    • DOGE
    • LTC
  • Exchange
  • Mining

© 2020 coin24h.com

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
  • bitcoinBitcoin(BTC)$26,836.00-1.19%
  • ethereumEthereum(ETH)$1,868.53-0.44%
  • tetherTether(USDT)$1.000.00%
  • binancecoinBNB(BNB)$305.53-0.39%
  • usd-coinUSD Coin(USDC)$1.000.07%
  • rippleXRP(XRP)$0.510.88%
  • staked-etherLido Staked Ether(STETH)$1,867.35-0.38%
  • cardanoCardano(ADA)$0.367053-1.26%
  • dogecoinDogecoin(DOGE)$0.071730-0.13%
  • matic-networkPolygon(MATIC)$0.890.08%
  • solanaSolana(SOL)$20.61-0.99%
  • litecoinLitecoin(LTC)$94.573.40%
  • tronTRON(TRX)$0.0752860.08%
  • polkadotPolkadot(DOT)$5.24-1.14%
  • binance-usdBinance USD(BUSD)$1.000.03%
  • shiba-inuShiba Inu(SHIB)$0.000008-3.10%
  • avalanche-2Avalanche(AVAX)$14.200.77%
  • daiDai(DAI)$1.000.03%
  • wrapped-bitcoinWrapped Bitcoin(WBTC)$26,870.00-1.12%
  • uniswapUniswap(UNI)$5.01-0.33%
  • leo-tokenLEO Token(LEO)$3.592.51%
  • chainlinkChainlink(LINK)$6.40-1.60%
  • cosmosCosmos Hub(ATOM)$10.38-0.35%
  • okbOKB(OKB)$45.82-0.79%
  • moneroMonero(XMR)$145.62-0.89%
  • ToncoinToncoin(TON)$1.77-3.37%
  • ethereum-classicEthereum Classic(ETC)$17.93-0.42%
  • stellarStellar(XLM)$0.091639-1.16%
  • bitcoin-cashBitcoin Cash(BCH)$113.530.25%
  • filecoinFilecoin(FIL)$4.873.56%
  • internet-computerInternet Computer(ICP)$4.731.11%
  • true-usdTrueUSD(TUSD)$1.000.14%
  • lido-daoLido DAO(LDO)$2.090.16%
  • AptosAptos(APT)$8.622.91%
  • quant-networkQuant(QNT)$116.09-0.50%
  • hedera-hashgraphHedera(HBAR)$0.050438-2.40%
  • ArbitrumArbitrum(ARB)$1.170.87%
  • crypto-com-chainCronos(CRO)$0.058655-1.75%
  • GGTKNGGTKN(GGTKN)$0.1121180.75%
  • vechainVeChain(VET)$0.019748-2.50%
  • nearNEAR Protocol(NEAR)$1.56-0.67%
  • apecoinApeCoin(APE)$3.05-3.91%
  • the-graphThe Graph(GRT)$0.124706-8.79%
  • algorandAlgorand(ALGO)$0.1493130.41%
  • the-sandboxThe Sandbox(SAND)$0.564.42%
  • paxos-standardPax Dollar(USDP)$1.00-0.11%
  • fraxFrax(FRAX)$1.000.30%
  • EdgecoinEdgecoin(EDGT)$1.00-0.03%
  • eosEOS(EOS)$0.89-0.74%
  • rocket-poolRocket Pool(RPL)$48.670.07%