An increase in the number of outstanding puts compared to calls in bitcoin options open interest could be a bearish omen ahead of Friday’s expiry, according to Deribit Chief Commercial Officer Luuk Strijers. The put-call ratio for bitcoin options across all expiries currently stands at 0.44, but this ratio adjusts to 0.52 for tomorrow’s expiry, indicating a higher number of puts compared to calls. This suggests a bearish sentiment for this month’s bitcoin options expiry compared to the general trend in open contracts. Strijers noted that the market expected a short-term downside for bitcoin, leading to investors using puts to hedge, while seeing the longer-term as having relatively more upside.
In addition to bitcoin, the call-put options skew for longer-term 30- and 60-day ether options is also slightly negative, indicating a mildly bearish outlook for these longer-dated expiries. Strijers pointed out that puts are currently more expensive relative to calls for ether options, signaling a bearish sentiment.
It is important to understand that options are derivative contracts that give a trader the right but not the obligation to buy or sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy, and a put offers the right to sell. Therefore, a trader who buys put options is implicitly bearish on the market, while a call buyer is bullish. Understanding these dynamics is crucial for making informed decisions in the crypto options market.
