On June 25, Ethereum will face the expiration of its most important options in 2021. Since $ 1.5 billion will be settled in open interest. This number is 30% higher than the March 26 expiration, which came when Ethereum’s price plummeted 17% in five days and reached a low of $ 1,550.
However, Ethereum rose 56% after options expired to reach $ 2,500 in three weeks. Therefore, it is essential to understand whether a similar market structure could exist for the June 25 options expiry.
It should be noted, that the June expiration contains more than 638,000 ETH option contracts. For a total of 45% of the total of $ 3.3 billion in open interest (OI).
Ethereum options Bulls or bears?
By the way, although it is the largest option maturity in history, open interest on Ethereum options reached its all-time high of nearly $ 5.5 billion on May 20.
In fact, the gigantic maturity is indicative of increased interest in the ETH derivatives market. Despite the token trading in the $ 2,100 range, 47.6% lower than its all-time high of mid-May.
In this regard, Luuk Strijers, commercial director of Deribit said: “The call / put option ratio for the June maturity is 0.79. Indicating that there are more buy options circulating than sell».
In addition, he added: “This is certainly indicative of bullish sentiment. However, most of this OI, is held in contracts far removed from the current price of ETH. Indicating a low probability of expiring in the money».
In contrast, Robbie Liu, Market Insights analyst at OKEx stated: “Maturity is still dominated by the bears. Because a significant amount of call options is far from the current price».
Who will be in control?
Unlike futures contracts, options are divided into two segments:
- Buy options allow the buyer to buy Ethereum at a fixed price on the expiration date.
- Put options are commonly used to hedge or protect against negative price variations.
So, it seems premature to say who might be the winner of this race. But, considering Ethereum’s current price at $ 2,094, does it seem that both sides are reasonably comfortable? Leave your opinion in the comments box.
Very importantly, it will be interesting to note the changes that this $ 1.5 billion expiration dominated by the shorties, will bring to the Ethereum network. Also, at the price of your token.
Finally, traders should keep an eye out for this event. Especially considering the impact of prices around the March maturity.
I close with this phrase from Adam Smith: “The real price of everything, what everything really costs the man who wants to acquire it, is the effort and the complication of acquiring it».