There’s $14 billion worth Bitcoin options expiring on Friday— $7.6 billion of it on Derebit and another $6.4 billion on the Chicago Mercantile Exchange (CME).

An options contract is just that: It grants the holder an option to buy or sell an asset in the future at a set price. So an investor who’s optimistic about the Bitcoin price going up might want the option to buy BTC at current prices. Conversely, someone who thinks the Bitcoin price might soon take a dive could want to reserve the option to sell a portion of their BTC holdings at today’s prices.

The split on Bitcoin options can offer some insight into what investors think how the price will move in the near future. On CME, a traditional finance mainstay that’s been around since 1898, 55% of the options expiring on Friday are calls (optimistic) and the rest are puts (pessimistic).

But on Derebit, a leading crypto derivatives exchange founded in 2016, investors appear to be more confident that the price of Bitcoin will continue to climb. The split there is 60% calls and 40% puts.

Meanwhile, open interest in Bitcoin contracts—which refers to currently open options contracts that expire tomorrow and in the coming months—has reached a staggering $21 billion. So far, there’s $2.3 billion worth of options expiring at the end of January on Derebit and another $1.5 billion on CME. Those two exchanges tend to account for the bulk of Bitcoin options contracts.

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Author: Stacy Elliott

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