$15 billion in smoke and mirrors. Approximately 177,000 BTC in options are set to expire this Friday at 10:00 AM (Paris time) on Deribit, the leading crypto options exchange. Their value is nearing $15 billion as Bitcoin struggles below the $85,000 mark.
However, you need to know how to interpret these figures. Four key concepts are enough to clear the fog.
Key takeaways from this article:
- Nearly $15 billion in Bitcoin options, representing about 177,000 BTC, are expiring on Friday on Deribit, with a clear bias toward bullish bets.
- The "max pain" level stands at $78,000, a metric that is often misleading. The largest positions are concentrated at $70,000 for both calls and puts, and between $60,000 and $75,000 for puts.
Bitcoin Options: calls, puts, and a market betting on the upside
An option is a contract. A call option gives you the right to buy Bitcoin at a pre-set price by a specific date, though the holder is not obligated to exercise it. This price is known as the strike price. A put option works the opposite way, allowing you to sell at that price. Essentially, you buy a call to bet on a price increase and a put to hedge against a decline. At expiration, an option that carries value is "in the money," while others expire worthless.
For this Friday’s expiration, bullish bets clearly dominate. According to its dashboard, Deribit reported approximately 100,800 calls against 76,200 puts as of Thursday morning. Each contract covers one Bitcoin. The put/call ratio (the number of puts divided by calls) currently sits at 0.76. Below 1, call buyers are in the lead. In other words, the lower the ratio, the more the market leans bullish. This is also a quarterly expiration, one of the four major dates of the year, which traditionally carries more weight.
The $15 billion in Bitcoin options is not leaving the market
This is the most common misunderstanding. That $15 billion represents the notional value of the contracts, calculated by multiplying the amount of Bitcoin covered by the current price. No one is withdrawing this amount from the market on Friday morning. Only the profits from options that end "in the money" change hands, which is just a fraction of the total.
The impact on the price comes from hedging. Market makers have sold a large portion of these options and must buy or sell Bitcoin to neutralize their risk as the price moves. For instance, when a call seller sees the price rising, they buy Bitcoin, fueling the upward trend. At expiration, some of these flows disappear, and the mechanical support they provided to the price may evaporate along with them.
Max pain at $78,000: the compass that often goes haywire
Then there is the famous "max pain" level—the price at which the greatest number of options would expire worthless. For buyers, this is the most painful level. Deribit lists it at $78,000 as of Thursday morning, about $6,000 below the current price. The day before, it was at $76,000, as it fluctuates based on positions. Some traders view it as a magnet, though its track record for prediction is mediocre.
It is better to look at open interest, i.e., the number of active contracts. The $70,000 strike holds the largest call position (8,274 BTC) and also the largest put position (7,653 BTC). For calls, the $90,000 (7,222 BTC) and $100,000 (6,950 BTC) strikes follow. On the put side, the largest protections are at $60,000 (5,571 BTC), followed by $75,000 (4,256 BTC). On the chart, puts (in yellow) are clustered below the max pain, while calls (in blue) dominate above the current price, except at $70,000 where both sides face off.
After the expiration, Bitcoin faces a busy Friday
Friday doesn’t end with Deribit. Durable goods orders are due in the afternoon, followed by the University of Michigan consumer sentiment index. Furthermore, the Fed raised rates to 3.75-4% on September 16. Finally, Bitcoin futures contracts at the CME (Chicago Mercantile Exchange) are also expiring, with settlement set for 5:00 PM (Paris time).
According to CoinGlass, Bitcoin has finished September in the red eight times over the past thirteen years. On Wednesday, a dip below $84,000 liquidated $237 million in long positions in just one hour.
Magali
Falling down the rabbit hole in 2017, I went from an avid reader to Editor-in-Chief of Le Journal du Coin. I enjoy getting involved behind the scenes of projects to share my vision of a decentralized future. A lover of fine literature, I coordinate our teams to transform technical complexity into human, precise, and jargon-free information. Between entrepreneurship and writing, my mission is clear: to popularize tomorrow, today.
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