{"id":200110,"date":"2021-03-12T03:38:59","date_gmt":"2021-03-12T00:38:59","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/this-months-ethereum-options-expiry-suggests-eths-upside-is-limited\/"},"modified":"2021-03-12T03:38:59","modified_gmt":"2021-03-12T00:38:59","slug":"this-months-ethereum-options-expiry-suggests-eths-upside-is-limited","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/this-months-ethereum-options-expiry-suggests-eths-upside-is-limited\/","title":{"rendered":"# This month\u2019s Ethereum options expiry suggests ETH\u2019s upside is limited"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a35fcb3b660d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a35fcb3b660d\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/this-months-ethereum-options-expiry-suggests-eths-upside-is-limited\/#The_primary_risk_indicator_for_options_is_neutral\" >The primary risk indicator for options is neutral<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># This month\u2019s Ethereum options expiry suggests ETH\u2019s upside is limited <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>To date, Ether (ETH) price has gained 85% in 2021, and options traders are still highly optimistic about the altcoin&#8217;s short-term performance. <\/p>\n<p>The upcoming March 26 expiry holds over 96,000 ($172 million) call option contracts open interest between $2,240 and $3,520. Does a 25% or higher gain correctly reflect the current market sentiment, or are these traders simply over-optimistic about Ether&#8217;s odds?<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-03\/10c41a28-fbb5-4180-9daf-b818da2f4480.png\"><figcaption style=\"text-align: center;\"><em>Ether price in USD. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>Even though the effective price for the right to acquire Ether at a fixed price on March 26 is much lower, these options cost buyers at least $2 million. If Ether fails to increase by 25% from the current $1,808 price in two weeks, these $2,240 call options will be completely worthless.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-03\/a45fe82f-8bf6-4863-8c98-4d18212bfbbb.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Ether options aggregate open interest,\u00a0<\/em><em>March 26.<\/em><em>\u00a0Source: Bybt<\/em><\/figcaption><\/figure>\n<p>As shown above, the call-put ratio is relatively balanced at 1.07, and the more bearish put options above the $1,800 strike are nonexistent. Meanwhile, bullish traders have crowded the scene above $2,240, partially because of their low price. The cost per option contract over the past couple of weeks ranged from $6 to $40.<\/p>\n<p>Even if these call option holders previously bought while Ether was trading below $1,400, it would make sense to close the position and lock in profits. These options will lose value over time as the March 26 deadline arrives unless the price rises above their respective strike price.<\/p>\n<p>Therefore, either these traders effectively expect Ether to break $2,240 in two weeks, or the options are being used in more complex strategies. Cointelegraph previously explained how $10,000 Ether call options are often used on calendar spreads.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_primary_risk_indicator_for_options_is_neutral\"><\/span>The primary risk indicator for options is neutral<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To assess traders&#8217; optimism level after Ether marked a local $1,880 top on March 9, one should look at the 25% delta skew.<\/p>\n<p>Whenever the options market is unwilling to take downside risk, the indicator shifts negatively. On the other hand, a positive 25% delta skew indicates traders are demanding less premium (risk) for upside protection.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-03\/5d77510b-80ad-4a6a-8a04-975210ff4103.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>3-day Ether options 25% delta skew. Source: laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The above chart shows the indicator ranging from 5 to negative 10, which is considered a neutral zone.<\/p>\n<p>Had option traders effectively been bullish, the upside-protection call options would have been trading at a premium.<\/p>\n<p>There&#8217;s a possibility, as previously stated, that investors are using a more complex strategy that involves different expiry dates or strikes. Still, if these options have been bought exclusively for upside leverage, it certainly doesn&#8217;t reflect the overall sentiment as measured by the skew indicator.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>autho<\/em><em>r<\/em><\/a><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/this-month-s-ethereum-options-expiry-suggests-eth-s-upside-is-limited\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# This month\u2019s Ethereum options expiry suggests ETH\u2019s upside is limited &#8221; To date, Ether (ETH) price has gained 85% in 2021, and options traders are still highly optimistic about the altcoin&#8217;s short-term performance. The upcoming March 26 expiry holds over 96,000 ($172 million) call option contracts open interest between $2,240 and $3,520. Does a&#8230;<\/p>\n","protected":false},"author":1,"featured_media":200111,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDMvYzJkMmE1MmQtMmRlNC00MjRkLThhMjUtMWE4ODE3NmVjZmJjLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74863,74860,75012,82402,74891,81210,74939,73785],"class_list":["post-200110","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-ether-price","tag-ethereum","tag-ethereum-options","tag-market-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/200110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=200110"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/200110\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/200111"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=200110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=200110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=200110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}