ETH's Implied Volatility Hits Lowest Level Ever

ETH's Implied Volatility Hits Lowest Level Ever

ETH's Implied Volatility Hits Lowest Level ever, according to Deribit's DVOL Index.

options traders are keeping a close eye on their clocks as roughly 26% of open positions on Deribit, the leading exchange for crypto options, are set to expire on Friday at 8am UTC.

The CEO of Deribit, Luuk Strijers, told The Defiant that roughly 85,000 open contracts for BTC worth $2.3B and 700,000 ETH contracts worth $1.3B will expire today.

Strijers said two times as many ETH traders are long the asset compared to those who are short, with Ether's'max pain' level currently sitting at $1,800, meaning a closing price of $1,800 would result in the largest number of options expiring worthless.

Roughly two and a half times as many BTC traders are long versus short, with Bitcoin's max pain point being $27,000.

With ETH currently trading at $1,805 and BTC currently trading at $26,450, it appears that many traders could still experience substantial losses.

Options are financial derivatives that enable traders to buy or sell an asset at an agreed price until a fixed expiry date. Traders risk only the option premium, enabling leveraged bets with limited capital. Options raise the possibility of both risk and reward, causing options traders to quickly rack up sizable losses if they are not careful.

Strijers added that the expected volatility for both markets is at 'rock-bottom'. A significant bullish move is imminent in the near future due to similar market conditions.

Strijers said he would not comment on the results of the vote.