Market Volatility Expected from September’s Bitcoin Options Expiry

September’s end-of-month bitcoin options expiry, noted as the second-largest in open interest on Deribit, may result in significant market volatility, according to Deribit CEO Luuk Strijers.

Strijers noted in an email to The Block:

“The end-of-month September bitcoin options expiry is the second largest in open interest we currently have on Deribit. Friday’s upcoming options expiry that will see over $5.8 billion expiring could trigger significant market activity and volatility after the expiration.”

Image: Deribit

The large number of expiring bitcoin options could induce increased price swings as traders adjust their positions, either by closing or rolling over options. Strijers explained:

“This larger expiry is likely to heighten market volatility or activity as traders close or roll over their positions, which could also impact price.”

In addition, Strijers pointed out a decline in the put-call ratio, now at 0.62, which suggests growing bullish sentiment in the market. The put-call ratio reflects the number of bearish put options compared to bullish call options; a lower ratio typically indicates a more bullish outlook. Furthermore, both bitcoin and ether show that calls (bullish bets) are pricier than puts (bearish bets) for longer-dated contracts in October, reinforcing a positive perspective.

In total, the $5.8 billion in options set to expire represents 33% of all outstanding contracts on Deribit, marking this as one of the year’s most significant expirations that could influence the market’s trajectory in the near term.

As of 12:03 a.m. ET, bitcoin (BTC) was flat in the past 24 hours, trading at $63,568. In comparison, ether’s price saw a slight decrease of 0.6%, settling at $2,601 during the same period.