Bitcoin ETF Options Attract $2B on Day One, Shifting BTC’s Market StructureBitcoin ETF Options Attract $2 Billion on Day One, Shifting BTC’s Market Structure
IBIT Options are now live Tuesday In a first move, market participants expect that this will increase institutional interest in Bitcoin (BTC). Here’s How they could impact the market.
IBIT Options are now live Tuesday In a first move, market participants expect that this will increase institutional interest in Bitcoin (BTC). Here’s How they could impact the market.
IBIT Options are now live Tuesday In a first move, market participants expect that this will increase institutional interest in Bitcoin (BTC). Here’s How they could impact the market.
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- On IBIT options reached a notional exposure of nearly $2 billion on their first day, which is unusual for a new option. More BTC’s record highs are likely due to the fact that more call options than puts were traded (4.4:1)
- Introducing IBIT options are expected to increase institutional interest in bitcoin as they provide new investment and risk-management strategies.
- Options Trading on IBIT can influence market dynamics by enhancing liquidity, allowing for hedging, and allowing speculation on BTC’s prices.
Options Some analysts have termed this feat as “amazing”. “unheard of” These metrics are based on the following:
“1st day of options is just shy of $1.9 billion in notional exposure traded via 354k contracts. 289k were Calls & 65k were Puts,” Bloomberg Intelligence The Analyst James Seyffart Posted in a X-post. “That’s a ratio of 4.4:1.”
“These options were almost certainly part of the move to the new #Bitcoin all time highs today,” Seyffart The move of bitcoin to new record night in late U.S. time was also mentioned. Tuesday.
IBIT Options are now live Tuesday In a first move, market participants expect that this will increase institutional interest in Bitcoin (BTC). In SeptemberThe U.S. SEC has approved options on several of the 11 bitcoin spot ETFs listed on various exchanges. More options products will be available in the next few days.
Unwrapping Options
Options Financial derivatives are financial derivatives which give the buyer the right but not the obligation to buy (in case of call options) or sell (in case of put options) an underlying asset for a specific price at or before a particular date.
A call option allows the holder to purchase a particular asset at a specific strike price within a given time period. A put option gives its holder the right of sale at the strike price during the specified period.
Call When traders anticipate price increases, they purchase options. If correct, the trader can then exercise the option and buy the stock at the strike price. Put Options are used to protect against price drops, or to bet on price declines. They allow you sell at the strike price even if the market value is higher.
How IBIT Options Could Change BTC Market Structure
Using options can open up a plethora of trading strategies for professional investors — which may bring more liquidity to the market and impact the market structure.
Institutions IBIT options can be used to hedge bullish exposure and generate additional income by selling calls. Speculators IBIT call options and put options can be used to benefit from price movements without having to own the underlying asset.
Traders You can also earn passive income by selling options. This is especially appealing in a market that is stable or slowly declining, where the options may expire worthless. Such Options trading strategies are popular among traders on the leading exchange Deribit.
Speaking Some analysts believe that the overwriting of IBIT call options will dampen implied volatility in the long run. In In the short-term, particularly during a bull-run, the demand for calls by investors could set up a GameStop like gamma squeeze.
Market Structure is a colloquial term that describes how traders and investors interact, as well as how assets are bought and sold. It also describes the regulations surrounding specific asset classes.
Options Professional investors can buy or sell with less price volatility if you offer them more options. Tracking Options data could help traders and everyone else understand what they think the market will do.
STORY CONTINUES ABOVE
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Near expiry dates, options can also predict and cause price swings — creating a window for short-term trading.
Edited By: Omkar Godbole.
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