Ethereum’s $1.5B options expiry on June 25 will be a make-or-break moment

On June 25, Ether (ETH) will face its largest options expiry in 2021 as $1.5 billion worth of open interest will be settled. This figure is 30% larger than March’s 26 expiry, which took place as Ether price plunged 17% in 5 days and bottomed near $1,550. However, Ether rallied 56% after March’s options expiry, reaching $2,500 within three weeks. These moves were completely uncorrelated to Bitcoin’s (BTC). Therefore, it is essential to understand if a similar market structure could be underway for June 25 futures and options expiry.

Take notice of how June’s expiry holds over 638,000 ETH options contracts, totaling 45% of the aggregate $3.4 billion open interest. Unlike futures contracts, options are divided into two segments. Call (buy) options allow the buyer to acquire Ether at a fixed price on the expiry date. Generally speaking, these are used on neutral arbitrage trades or bullish strategies.

Meanwhile, the put (sell) options are commonly used to hedge or protect from negative price swings. There’s a disproportionate amount of call options at $2,200 and higher strikes. This means that if Ether’s price on June 25 happens to be below this level, 73% of the neutral-to-bullish options will be worthless. The 95,000 call options still in play would represent a $228 million open interest.

On the other hand, most protective put options have been opened at $2,100 or lower. Consequently, 74% of those neutral-to-bearish options will become worthless if the price stays above this level. Therefore, the remaining 73,700 put options would represent a $177 million open interest. It seems premature to call who might be the winner of this race, but considering Ether’s current $2,400 price, it looks like both sides are reasonably comfortable. However, traders should keep a close eye on this event, especially considering the price impact that surrounded the March expiry.

Ethereum’s $1.5B options expiry on June 25 will be a make-or-break moment, Cointelegraph, Jun 14