Ether options trading volume surpasses Bitcoin as Shanghai upgrade drives demand for bullish plays

The Ether (ETH) options market has seen more activity than Bitcoin (BTC) in the past 24 hours, the first instance of this in 2023.

Major exchanges, including industry leader Deribit, have seen $1.23 billion worth of ether option contracts change hands in the past 24 hours. That’s nearly 60% of global crypto options activity and 50% more than bitcoin’s nominal trading volume of $823.7 million, according to Swiss-based data-tracking website Laevitas.

Options are derivative contracts that give the buyer the right, but not the obligation, to buy the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy while a put option gives the right to sell. Traders use call and put options to hedge their spot/futures market exposure and to achieve an asymmetric payout.

The latest surge in activity in the ethereum options market comes on the heels of Ethereum̵[ads1]7;s successful implementation of the long-awaited Shanghai upgrade on Wednesday. The upgrade has enabled the withdrawal of over 18 million Ether staked in the network since December 2020, reducing the risk of staking – the process of locking coins into the blockchain to increase network security in return for rewards.

Since then, CoinDesk’s Ether Price Index (ETX) has surged over 10% to an eight-month high of $2,115, defying fears of a staggering price post-upgrade and outperforming market leader bitcoin. The double-digit gain has sparked investor interest in ether call options.

“We have seen strong demand for OTM [out-of-the-money] calls in ETH,” Chris Newhouse, an OTC trader at crypto market maker GSR, wrote in an analysis published on Deribit.

Calls at strike prices above the ether’s current market price are called “out-of-the-money”. They are cheap compared to calls at a strike below the current spot price.

The increased demand for on-air calls is evident from the short-term and long-term options bias, which has turned positive. The skewness measures the spread between the implied volatility premium or call and call prices.

Source link

Back to top button

mahjong slot