October 31st: $16 Billion Hangs in the Balance
The Calm Before the (Potential) Storm So, $16 billion in Bitcoin and Ethereum options are set to expire on October 31, 2025. (That’s a lot of zeroes.) Deribit, the exchange where this all goes down at 8:00 UTC, is bracing for what could be one of the largest monthly crypto derivatives events of the year. Last week was only a $6 billion expiry. This week is nearly triple that, thanks to the monthly rollover. The key thing to watch is something called "max pain." It's the strike price where option holders stand to lose the most. For Bitcoin, that's sitting at $100,000 (a psychological barrier, if nothing else), while the actual trading price is around $91,389. Historically, Bitcoin's price tends to gravitate toward this max pain zone as expiry approaches. Blame it on market makers hedging their positions. The put-to-call ratio – a measure of whether more traders are betting on gains or losses – is 0.54. More bulls than bears, at least on paper. But Deribit's data shows that call open interest (94,539 contracts) far exceeds put open interest (50,943). What does that mean? Well, it's not as simple as "everyone's bullish."Options Market: Bullish Bets vs. Hidden Caps
Decoding the Options Market Deribit's analysts point to the recent market pullback as a major factor. Traders who were long puts (betting on a price drop) apparently took profit when Bitcoin hit the $81,000-$82,000 range. Smart move, if you ask me. They also highlighted an interesting trade: a bullish "call condor" targeting $100,000+ by the end of December. This involves buying and selling call options at different strike prices to profit from upside within a defined range. The initial buy-in was around $86,500 to $88,000. The ideal final settlement, according to Deribit, is between $106,000 and $112,000, with a potential 10:1 payoff. I’ve looked at hundreds of these filings, and I have to say, this is an unusually aggressive end-of-year bet. But here's the catch: “Hidden beneath the Call condor volume were persistent and familiar Call over-writers on the Dec100k and Jan 100-105k Calls.” Someone's actively capping the upside. This tug-of-war between bullish and bearish sentiment is creating a tense situation. The Fleet Asset Management Group (FLAMGP) also weighed in, noting that Bitcoin briefly moved above $88,000 after falling to a seven-month low of $80,554. While institutional adoption is expanding, and policy discussions are incorporating crypto themes, the broader market remains subdued. Equities rallied, fueled by expectations of a Federal Reserve interest rate adjustment in December, while crypto markets lagged behind. FLAMGP also highlighted the increased demand for protective positions in the cryptocurrency options market. Deribit data showed that the $80,000 bitcoin put option became one of the most actively traded contracts. Bitcoin's funding rate for perpetual futures turned negative recently, suggesting increased short-position activity. For more information on FLAMGP's risk-management approach, see FLAMGP Provides Market Analysis and Outlines Institutional Risk-Management Approach. FLAMGP emphasized its risk-management practices, including AI-based risk monitoring and liquidity-responsive asset allocation.Ethereum's Expiry: Less Drama, Still a Wildcard
Ethereum's (Slightly) Less Dramatic Expiry Ethereum's expiry is smaller, but still significant. About $1.7 billion worth of ETH options are in play, with the asset trading around $3,014 and a max pain level of $3,400. There are 387,010 calls open versus 187,198 puts, for a put–call ratio of 0.48. Unlike Bitcoin, ETH's positioning is less extreme. The downside skew is lighter, and open interest is more evenly distributed across major strikes. Much of ETH's influence today may depend on whether Bitcoin volatility spills over into the broader market. The bottom line: billions in open interest are about to unwind. Liquidity conditions could shift rapidly. If prices drift toward max pain, market makers might step in. If volatility spikes, these expiries could act as accelerants. Betting on Chaos So, what’s the real takeaway here? The crypto market is a complex beast, especially when you throw derivatives into the mix. This $16 billion options expiry isn't just a date on the calendar; it's a potential catalyst for significant price swings. The conflicting signals – bullish call condors versus cautious call overwriting – suggest a market struggling to find direction. Whether we see a "Santa rally" or another sharp correction remains to be seen. But one thing's for sure: buckle up.