The open interest on Ether’s (ETH) option contracts has increased fivefold over the past three months to currently stand at USD 452 million.
The USD 112 million that expire this Friday could have a considerable impact on the market, although everything will depend on the balance between bullish and bearish strategies.
The graph above shows how strong the ETH options market has been over the past month.
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Although the open interest may seem modest compared to the $1.9 billion Bitcoin Options Market (BTC), ETH options have gained prominence over the past few months.
Not all option market strategies are bullish or bearish. Covered calls consist of buying the underlying asset while selling a call.
The goal here is to benefit from a strategy that offers a fixed income as long as there is a decent enough premium. In general, this is a strategy between neutral and positive, these investors will benefit as long as Bitcoin Investor stays above a certain threshold.
Although the open interest for options below the $320 strike price is considerable, these options could have been built more than a month ago when ETH was trading below $250.
These in-the-money options mean that prices are 15% or more below the current ETH price, and are commonly used for the above strategy.
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There are currently 97,000 Ether options with an exercise price of USD 400, although this also includes all calendar maturities until March 2021. By exclusively analyzing the expiration date of August 28th, a trader would have a better indicator to determine the true sentiment of investors.