Bitcoin’s
put-call ratio has jumped ahead of Friday’s multi-billion-dollar options expiry on Deribit, but its traditional bearish interpretation may not tell the full story this time.
The put-call open interest ratio refers to the ratio of active put contracts to active call contracts at a given time. An increase in the put-call ratio indicates a bias towards put options, offering protection against downside risks, and is interpreted as representing a bearish market sentiment.
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However, the latest spike is at least partly driven by “cash-secured puts” – a yield-generation and BTC accumulation strategy. The strategy involves selling (writing) put options, a move analogous to selling insurance against price drops in return for a small upfront premium.
At the same time, the writer keeps enough cash (in stablecoins) on the sidelines to buy BTC as obligated if the prices decline and the buyer decides to exercise the right to sell BTC at the predetermined higher price.
The premium collected by writing the put option represents a yield with the potential for BTC accumulation if the put buyer exercises the option.
“The put/call ratio has risen to 0.72 — up from just above 0.5 in 2024— indicating a growing interest in put options, often structured as cash-secured puts,” Lin Chen, head of business development – Asia at Deribit, told CoinDesk.
On Friday, at 08:00 UTC, a total of 141,271 BTC options contracts, worth over $14 billion, representing more than 40% of the total open interest will expire on Deribit, according to data source Deribit Metrics.
Of the total due for settlement, 81,994 contracts are calls, while the rest are put options. On Deribit, one options contract represents one BTC.
Chen said that nearly 20% of expiring calls are “in-the-money (in profit),” meaning that a large number of market participants hold calls at strikes that are below BTC’s current spot market rate of $106,000.
“This suggests call buyers have performed well this cycle, aligning with the persistent inflows into BTC ETFs,” Chen noted.
Holders of in-the-money (ITM) calls are already profitable and may choose to book profits or hedge their positions as expiry nears, which can add to market volatility. Alternatively, they might roll over (shift) positions to the next expiry.
“As this is a major quarterly expiry, we expect heightened volatility around the event,” Chen said.
Broadly speaking, most of calls are set to expire out-of-the-money or worthless. Notably, the $300 call has the highest open interest, a sign traders likely hoped for an outsized price rally in the first half.
The max pain for the expiry is $102,000, a level where option buyers would suffer the most.
Latest market flows indicate expectations for back-and-forth trading, with a slight bullish bias as we approach the expiry.
According to data tracked by leading crypto market maker Wintermute, the latest flows are skewed neutral, with traders selling straddles —a volatility bearish strategy — and writing calls around $105,000 and shorting puts at $100,000 for the June 27 expiry.
“For #BTC options, flows skew neutral with straddle/call selling around 105K and short puts at 100K (27 Jun), pointing to expectations of tight price action into expiry. Selective call buying (108K–112K, Jul/Sep) adds a capped bullish tilt. IV remains elevated,” OTC desk at Wintermute, told CoinDesk in an email.
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