On Nov. 13, a total of $525 million in Bitcoin (BTC) options open interest is set to expire. This is similar to last week when $470 million in options open interest also expired. This presents somewhat unusual activity as most volume goes through monthly and quarterly options.
On Nov. 5 (last Friday), put (sell) options open interest was 30% larger than call (buy) ones. Deribit exchange holds $431 million open interest for this Friday’s expiry and Bit.com has $72 million.
Before coming to quick conclusions on whether this figure is bullish or bearish, it’s important to take a more detailed view in order to gauge the potential buy and sell pressure near expiry.
For example, an $18,000 call option holder has not much gain in pushing up the Bitcoin price to $16,500 with less than 32 hours till expiry. These options are already deemed worthless by the market. The same can be said for a put (sell) option down to $14,000.
Thus, by excluding call options above $16,700 and put options below $14,400, traders can have attain a more realistic view of the current market conditions.
Deribit BTC options for Nov. 13 expiry. Source: Deribit
Deribit exchange holds 5,915 BTC call options ranging from $14,000 to $15,750. Bit.com has 1,050 BTC and OKEx currently holds 490 BTC. Therefore, there’s an immediate $117 million in open interest supporting current levels.
Meanwhile, the put options ranging from $15,250 to $16,500 amount to 2,130 BTC at Deribit, followed by 860 BTC at Bit.com, plus another 100 BTC at OKEx. Thus, the immediate sell-side pressure amounts to $48 million open interest from put options.
The reason behind this difference is that most put options have been depreciated and have no market value. This movement excludes 84% of the $298 million put options open interest.
Therefore when analyzing just the option strikes closer to market levels, there is a sizable $69 million imbalance favoring the buy-side. Similar to the previous week, there have been some large bearish trades likely related to U.S. elections.
Regardless of the market having enough strength to break the $16,000 resistance, those short-term options are currently supporting $15,500 and higher prices.
OKEx, Bit.com and Deribit weekly contracts mature Nov. 13 at 8:00 AM (UTC).