Bitcoin Options Expiry Brings $16 Billion Settlement as Calls Dominate

Massive $18 Billion Options Settlement Approaches

Bitcoin and ether quarterly options settlements are arriving on Friday, representing a total value of nearly $18 billion. Bitcoin accounts for $15.9 billion of this total, while ether contributes $2.1 billion.

The settlement occurs on September 25 at 8:00 UTC. This event is significant because the Bitcoin expiry alone will remove 37% of the open interest on Deribit, one of the world's largest crypto derivatives exchanges. Open interest refers to the total value of active options contracts still held by traders.

As of this writing, Bitcoin is trading near $85,500. The large volume of expiring contracts could reshape dealer hedging flows and potentially trigger short-term volatility in the market.

Key Numbers for the Expiry

• Bitcoin open interest expiring: $15.9 billion
• Ethereum open interest expiring: $2.1 billion
• Total open interest on Deribit before expiry: ~$43.5 billion
• Percentage of Deribit BTC open interest affected: 37%
• Bitcoin call options in the money: More than half of the $9.4 billion call notional
• Put options status: Almost entirely worthless (out of the money)
• Bitcoin spot price: ~$85,500
• Max pain price for Bitcoin: $75,000

What Deribit Executives Say

Luuk Strijers, CEO of Deribit, stated that the September 25 quarterly expiry is one of the largest of the year. He noted that the positioning is heavily skewed toward bullish bets. The put/call open interest ratio stands at 0.69, indicating that traders have built positions expecting higher prices.

Jean-David Péquignot, Deribit’s Chief Commercial Officer, highlighted that the $70,000 strike price has more open contracts than any other level. The call options at this strike are now considered deep in the money, meaning they are profitable because the current market price is well above the strike price.

Understanding the Bullish Bias

A call option gives a buyer the right to purchase an asset at a fixed price by a certain date. Traders use these when they expect prices to rise. In contrast, a put option protects against price drops. In this expiry, more than half of the call bets are in the money, while put options are mostly worthless.

Market analysts track a concept called "max pain." This is the price level where option buyers would lose the most money at expiry. The theory suggests that market makers may push prices toward this point. For Bitcoin, the max pain level is $75,000, which is well below the current spot price of $85,500. Deribit has described this level as a "soft magnet for price into expiry," though this theory is widely debated.

The recent rally in Bitcoin through the $80,000 to $87,000 range may have been amplified by dealer hedging. This is a source of buying pressure that could fade once the options are settled.

Why This Matters for Market Stability

The crypto options market has grown significantly since 2020. Quarterly settlements have become key events for traders to watch. The shift in positioning as these contracts expire can influence short-term price movements and volatility.

With a third of the entire $15.9 billion Bitcoin book currently in the money, the settlement process will involve substantial changes in market dynamics as traders close positions or exercise their rights.

What Happens Next

The options will officially expire on Friday, September 25, at 8:00 UTC. Traders and institutions will observe how the market reacts to the removal of these large derivative positions and the resulting changes in hedging requirements.

Sources

• CoinDesk

Read also: $15.6 billion in Bitcoin options set to expire Friday, Decrypt reports