Did you bump your head this morning? Maybe drop a weight on your toe or realize your socks don’t match? You’re not alone—it’s Friday the 13th, a day many people associate with bad luck. Even the crypto market isn’t escaping the drama today, as Bitcoin options worth $2.1 billion are set to expire.
What Are Bitcoin Options?
Let’s break it down. A Bitcoin option is a contract that gives you the right—but not the obligation—to buy or sell Bitcoin at a set price. Think of it as a tool that traders use to either make bets on Bitcoin’s price or protect themselves from risk.
For example, some traders might bet that Bitcoin’s price will rise, while others prepare for it to fall. When these contracts expire, it can cause big shifts in the market as traders either cash in or cut their losses.
Today, about 21,000 Bitcoin options are expiring. That’s a lot of contracts, and it could lead to noticeable changes in Bitcoin’s price.
How Do Options Affect the Price of Bitcoin?
Right now, the total value of Bitcoin options set to expire is $2.1 billion. To understand the mood among traders, many look at something called the put-call ratio. This measures how many contracts are betting on the price going down (puts) versus up (calls).
Currently, the ratio stands at 0.83. That means there are more traders betting on the price of Bitcoin going up than down. These optimistic traders are often called bulls, while the pessimists are referred to as bears.
Another term that comes up in options trading is the max pain point. This is the price level where the most options contracts become worthless. For Bitcoin, this point is currently $98,000. If Bitcoin’s price stays far from this level, many traders holding certain options could lose money.
Bitcoin has been bouncing around quite a bit this week. According to CoinMarketCap, Bitcoin is currently priced at $100,350 per coin, a couple thousand clear of $98,000. We’ll know more in a couple of hours.
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