Trader places $2 million bet on XRP price swings before August 28

Large options trade targets XRP volatility

An options trader made a $2 million bet that the price of XRP, a cryptocurrency, will move sharply in either direction before August 28. The trade involves buying 2 million contracts tied to XRP’s price at $1.16.

The trader paid $62,000 for these contracts, which act like insurance against big price swings. If XRP moves far enough from $1.16—up or down—the trader profits. If the price stays close to $1.16, the trader loses the $62,000.

What the trade involves

• The trader bought a long straddle, a type of options trade that profits from large price movements in either direction.
• The contracts are set at a strike price of $1.16, meaning this is the price XRP must move away from to make the trade profitable.
• The trade expires on August 28, giving the trader eight days to see a significant price change.
• The total value of the contracts is $2.32 million, but the trader only paid $62,000 upfront for them.

Why this trade was made now

The trade was placed as XRP’s price surged nearly 15% in a single day, rising from around $1.16 to $1.34 before settling at $1.26. Trading volume also increased sharply, suggesting heightened market activity.

Earlier this quarter, traders were betting on XRP’s price staying stable, but this new trade signals a shift toward expecting more volatility.

How options work in simple terms

Options are contracts that let traders bet on whether an asset’s price will rise or fall. A call option profits if the price goes up, while a put option profits if the price goes down. Buying both at the same time, as in this trade, means the trader wins if the price moves far enough in either direction.

If the price doesn’t move much, the options lose value, and the trader loses the money paid for them (the premium). In this case, the premium was $62,000.

What is confirmed

• The trade was reported by derivatives analytics firm Laevitas.
• The trader bought 2 million XRP options contracts at a $1.16 strike price, expiring August 28.
• The premium paid for the contracts was $62,000.
• XRP’s price rose nearly 15% on the day the trade was placed, reaching $1.34 before settling at $1.26.

What is still unclear

• It is not known who placed the trade or their reasons for doing so.
• Whether the trade will be profitable depends on how much XRP’s price moves by August 28.

Why this trade matters

This trade reflects growing expectations of volatility in XRP’s price. Large options trades like this can signal that traders anticipate significant market movements, which may influence other investors’ decisions.

Options trading is also a way for traders to manage risk or speculate on price changes without directly buying or selling the cryptocurrency itself.

Sources

• CoinDesk