Bitcoin options contracts expire on the Chicago Mercantile Exchange (CME). Meanwhile, Bitcoin is facing heavy resistance at current levels, so will it pull back?
Bitcoin options expiry is approaching again, with 105,000 BTC contracts on balance on April 28. In addition, there is a maximum pain limit of $27,000 and a notional value of $3.1 billion.
Bitcoin options are mixed
The current buy/sell ratio is 0.85, which indicates a neutral-to-bearish bias.
The maximum pain price is the strike price with the most open bitcoin options contract. It also happens to be the price at which most losses will be incurred for the largest number of contract holders at expiration.
Open Interest (OI) is 105,000, which indicates the number of outstanding Bitcoin options contracts that have not yet been settled. The next batch of the contract with a similar OI will expire on May 26, according to Deribit.
Moreover, the buy/sell ratio is calculated by dividing the number of sell (short) contracts traded by the number of buy (long) contracts.
A value of 1 means that trading is evenly balanced between buyers and sellers. However, a value below 1 is generally bearish as speculators are selling assets more than buying.
In addition, 807,000 Ethereum options contracts are scheduled to expire on April 28. There is a maximum pain limit of $1,850 and a default value of $1.54 billion.
The buy/sell ratio for ETH options is similar to that of Bitcoin contracts at 0.8.
Options allow speculators to buy or sell assets at a specified price with the “option” to sell the contracts at any time. It is more flexible than futures contracts that have fixed expiration dates.
Bitcoin is currently trading at $29,506, after gaining 1.4% over the past 24 hours. However, it is facing significant resistance at the $30,000 region, so you might struggle to get around that. Moreover, the expiry of Bitcoin options is not likely to affect the BTC price over the weekend.
CME Group to Expand Expiration Options
Earlier this month, CME announce It plans to expand its range of encryption options.
The exchange’s standard and small-cap Bitcoin and Ethereum contracts will have daily expiry options starting May 22.
Giovanni Vicioso, global head of cryptocurrency products at CME Group, said the new contracts “will provide market participants with greater precision and versatility in managing bitcoin and ether price risks in the short term.”
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