Investors consolidate put-call ratios as $14B Bitcoin options set to expire at $107K

Over $14 billion worth of Bitcoin options contracts are scheduled to expire on Deribit at 08:00 UTC on Friday, June 28. The options are one of the largest quarterly settlements this year and have already begun influencing sentiment and volatility expectations across crypto markets.

According to data provided by Deribit Metrics, a total of 141,271 Bitcoin options contracts will expire, with open interest amounting to more than 40% of Deribit’s total. 

Each contract on Deribit equals one BTC, bringing the total notional value of the expiring contracts to over $14 billion at current prices. The spot price of Bitcoin stood near $107,300 at the time of reporting.

Put-call ratio increase sends mixed market sentiment signals 

Leading into the expiry, investors have increased their use of put options, driving the Bitcoin put-call open interest ratio to 0.72. An uptick in the put-call ratio is interpreted as a bearish signal.

However, some analysts believe that the bearish read may be oversimplified in this case. Lin Chen, head of business development for Asia at Deribit, noted that much of the recent put activity appears to be driven by “cash-secured puts,” a common yield-generation strategy. 

In this approach, investors sell put options while keeping enough capital in reserve to buy BTC if prices drop and the puts are exercised. This tactic is akin to collecting a premium in exchange for a willingness to buy Bitcoin at a discount, and may not necessarily mean the market is outright pessimistic.

Call options lead, but only a fraction profitable

Out of the 141,271 contracts expiring Friday, 81,994 are call options, and the remainder are puts. Yet, despite the volume of calls, most of them are expected to expire worthless. 

According to Deribit, nearly 20% of the call options are currently “in the money,” with strike prices below the current spot level of $106,000. A portion of call holders have already secured profitable positions during the Q1 2024-Q1 2025 bullish cycle. 

Holders of profitable positions may look to either book gains or roll over their exposure to future contracts, and both moves can increase short-term market volatility. Deribit expects a spike in market movement around the expiry window, given its size and quarterly significance.

Tight trading range, max pain near $102K

Most expiring contracts with extreme strike prices are unlikely to pay out. The $300 call option has the largest open interest among out-of-the-money contracts, which shows that some traders had bet on a sustained rally in the first half of the year that failed to materialize.

The “max pain point” for this expiry,  the price level at which the greatest number of option buyers would incur losses, is calculated at $102,000. As of midweek, Bitcoin’s price is consolidating between $106,000 and $107,500, just above that threshold.

Far out-of-the-money strikes have larger intervals, while those near the current price are more granular. Available increments include $50, $100, $500, $1,000, $5,000, and $10,000, several hedging and speculative possibilities for traders.

Crypto market maker Wintermute reported that traders are selling straddles, a strategy that profits when volatility decreases, and writing call options around the $105,000 level while also shorting puts at $100,000. 

“Flows skew neutral with straddle/call selling around 105K and short puts at 100K… pointing to expectations of tight price action into expiry,” Wintermute’s OTC desk surmised.

On the daily chart, Bitcoin is treading a horizontal trend channel, and investors are looking for signals of a breakout or breakdown from the current range.

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