Nearly $18 billion worth of Bitcoin and Ether options are set to expire Friday, an event that could alter dealer hedging activity and trigger a shift in short-term volatility.
Bitcoin, trading around $84,277, and Ether at $2,663 are heading into quarterly options expiries, with both contracts representing multi-billion-dollar positions. Current positioning is tilted toward bullish strategies, particularly in Bitcoin.
According to Deribit CEO Luuk Strijers, about $15.9 billion of Bitcoin options and $2.1 billion of Ether options will expire at 8:00 UTC. The Bitcoin settlement alone represents roughly 37% of Deribit’s total BTC open interest, which stood near $43.5 billion. Open interest refers to the dollar value of active options contracts, with each contract representing one BTC or ETH.
Strijers described the Sept. 25 quarterly expiry as one of Deribit’s largest settlements of the year. He said September Bitcoin options remain heavily weighted toward calls, with a put/call open-interest ratio of 0.69, indicating that traders established a significant portion of the positioning in anticipation of higher prices.
A call option gives its holder the right, but not the obligation, to purchase an underlying asset at a predetermined strike price before or at expiration. Traders generally use calls to position for an increase in the underlying asset.
For example, an investor might pay a $100 premium for the right to purchase a $1,000 laptop. If the laptop rises to $1,200, exercising the option can generate a $200 gain before accounting for the $100 premium. If the price remains at or below $1,000, the buyer can allow the option to expire and lose only the premium.
Put options work in the opposite direction and can be used to benefit from falling prices or protect against a potential decline.
Crypto options have grown substantially since 2020, with traders increasingly combining calls and puts with spot and futures positions to express views on price direction, volatility and time decay. As a result, large quarterly settlements have become important events for participants across the digital-asset market.
Bitcoin’s $75K Max Pain Level
One of the key metrics traders monitor ahead of major expiries is “max pain,” the price at which option buyers collectively face the largest potential losses at expiration. The concept remains widely debated, with one theory suggesting that options sellers may have an incentive to keep prices near that level.
For Friday’s Bitcoin expiry, the max-pain level is around $75,000, substantially below the roughly $85,500 spot price. Deribit described the level as a potential “soft magnet” for Bitcoin as expiration approaches.
Open interest is particularly concentrated at the $70,000 strike, which has more outstanding contracts than any other strike. Many of the calls at that level are already deep in the money.
Strijers said 55% of the $9.4 billion worth of Bitcoin call options expiring Friday are currently in the money. Most puts, by comparison, have little value at current prices. Overall, roughly one-third of the $15.9 billion Bitcoin options book is currently in the money.
An option is considered in the money when its strike price is favorable relative to the underlying market. A call is in the money when the asset trades above its strike, while a put is in the money when the asset trades below its strike.
Deribit Chief Commercial Officer Jean-David Péquignot said the concentration of open interest across different strikes points to potential support around $75,000.
He noted that significant call open interest is clustered around $85,000, $90,000, $95,000 and $100,000. These levels correspond with large call-condor structures that are becoming increasingly relevant as Bitcoin trades around $86,000.
On the downside, put-based defensive positions are concentrated around $60,000, $70,000 and $75,000, creating several layers of potential support.
Expiry Could Increase Short-Term Volatility
Friday’s settlement could introduce additional volatility and potentially lead Bitcoin into a new trading range as the existing options positions expire.
The reason is partly related to dealer hedging. Strijers said that Bitcoin’s move through the $80,000-$87,000 range may have been supported by hedging activity linked to short call positions.
Dealers that are short calls generally need to purchase the underlying asset as its price rises to maintain a delta-hedged position. That buying can reinforce an upward move in the spot market.
Once the options expire, however, the related gamma and hedging flows disappear. Strijers said the fading of those flows could reduce the price-pinning effect while increasing short-term volatility and allowing Bitcoin’s trading range to reset.
Traders will also be watching Bitcoin’s reaction around $85,000 and how existing positions are rolled into the October and December expiries.
A rollover occurs when traders close or offset an existing options position and simultaneously establish a similar position with a later expiration date.
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