Bulls push Ethereum price higher ahead of Friday’s $930M options expiry
April 27, 2021. Summarized by summa-bot.
Compression ratio: 45.7%. 1 min read.
Bulls have a $115 million lead on Friday's $930 million Ethereum options expiry, a signal that ETH could be en route to new all-time highs.
However, as displayed above, the 28% gain over the last couple of days caused the open interest on Ether futures to reach $8. 2 billion, which is just 5% below its April 15 record.
A similar event took place in the options markets, which have grown by 45% since the March 25 expiry.
While the current $4. 2 billion Ether options open interest represents an all-time high, $930 million of these are set to expire on April 30.
It is worth noting that not every option will trade at expiry, as some of those strikes now sound unreasonable, especially considering there are less than three days left.
Options are divided into two segments, as the call (buy) options allow the buyer to acquire Ether at a fixed price on the expiry date.
Meanwhile, the put (sell) options are the preferred instrument for hedging to gain protection from negative price swings.
To understand how these competing forces are balanced, one should compare the calls and put options size at each expiry price (strike).
A weird pattern emerged as bears were caught by surprise, with 91% of the put options open interest at $2,400 or lower.
This difference favoring call options would double at $2,880, although this doesn't seem to justify a 10% hike in Ether price.
At the moment, there is little reason to believe that the April 30 options expiry will bring any surprise for Ether price.