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Come June 25, the largest Options expiry will be witnessed by the traders in ether prices. Ether’s $1.5 billion Open Interest will be settled on June 25, 2021. It is 30% more than the March’s expiry.
Ether is going to face its largest option expiry come June 25, 2021. Ether’s $1.5billion open interest will be settled on June 25, which is 30% more than March’s expiry. It took place because either price plummeted 17% in five days and was at $1,550.
However, Ether rallied 56% after March’s Options expiry. It reached $2,500 within three weeks. These moves were not related to Bitcoin’s move. Hence, it is important to know whether a similar market trend will be observed for June 25 futures and options enquiry.
Bullish and bearish trend
On March 11, there was a show of force organised by ether miners. It was organised against EIP-1559, which will significantly reduce their revenues.
On March 22, when an ethereum repository was launched by CoinMetrics, the situation dropped more. It was assumed that the highly anticipated EIP-1559 network upgrade would solve the high gas problem.
But slowly things changed when Visa announced to use the ethereum blockchain for all transactions made in fiat. This was announced on March 29 and from April 15 onwards the Berlin upgrade was successfully implemented.
With the launch of the Berlin upgrade, the fees of the gas started declining and the average gas fee came at a manageable level.
Positioning of traders
It is very important to find out how large traders have positioned themselves. It is not advisable to judge or speculate whether these phenomena of the ether price bottoming near the upcoming $1.5 billion options expiry are bullish or bearish.
In June expiry, ether holds over 638,000 ETH options contracts, which is a total of 45% of the aggregate $3.4 billion open interest. Just like futures contracts, options are also divided into two segments. Call or Buy Options. Under this, the buyer can acquire either at a fixed price on the expiry date.
Put or sell options are used to hedge or protect from negative price swings.
The race between bulls and bears
There is a disproportionate amount of call options at $2,200 and higher strikes. If the ether prices on June 25 is below this level then 73% of neutral to bullish options will be worthless if the prices stay above this level. Hence, the remaining 73,700 put options will represent a $177 million open interest.
So, it is inappropriate to say who will be the winner of this race. However, considering Ether‘s current price of $2,400, it looks like both sides are comfortable. Nevertheless, traders should keep a close watch on this event, especially considering the price impact that surrounded the March expiry.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
