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Traders Are Betting on the June $80,000 Bitcoin Call Option

Considering the bullish performance of Bitcoin (BTC) in the past weeks, it does not seem unreasonable to bet on $80,000 Bitcoin call options to expire in June. This was not the case a couple of months ago when Bitcoin price dropped to $30k level after rising to $42k on January 8.

Bitcoin price. Source: TradingView

As the chart above shows, on January 26, when the price of Bitcoin was trading at $32,000, a 150% increase was required to reach the $80,000 level. Therefore, the June buy options at $80,000 traded at Deribit for $2,240, or 0.07 BTC, at that time.

BTC call option with a June maturity date, with a transaction price of $80K. Source: Deribit

In less than two months, Bitcoin reached $61,700 on March 13, and the price of the call option jumped to 0.15 BTC, or $9,255. The value tripled in less than seven weeks. Note that despite a 93% rally, BTC needed to gain another 30% to reach $80,000.

BTC June call options. Source: Deribit

Despite the recent rise in the BTC price, the implied options probability (delta) of these options is at 39%. The price of the call option has also risen due to the volatility of BTC as sellers demanded a larger premium due to their risk-taking in uncertain markets.

Regardless of which direction, intense price swings increase volatility and unexpected news causes this indicator to rise.

The historical fluctuation of 60 days of Bitcoin options. Source: Buybitcoinworldwide.com

The chart above shows how Bitcoin volatility increased from 4% in January to the current 5%. Call option buyers consider this event bullish. Even if the price of BTC remained the same, the option price would have risen accordingly.

Options pricing relies heavily on the distance of the expiry date as the $80,000 call options may become worthless two days before maturity. For this reason, investors should not pay too much attention to the implied options probability (delta) which seems far-fetched because of the fact that BTC gained 43% in the last 100 days.

If you have any questions and comments on Bitcoin today, use the form below to reply.


© MarkStevenson for Commodity News, 2021. | Permalink | No comment |
Published under: Bitcoin, Forecasts

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