September’s Options ActionSep 14, 2021
BTC options open interest is heavily skewed towards the Sep. 24 expiry and the Dec. 31 expiry. Both of these are quarter-end option expiries, which tend to see the most interest. Given this quarter’s options are set to expire in 10 days, higher than normal volatility (compared to the last couple of months) is to be expected.
Through Paradigm’s order flow data, we’ve seen a good amount of Sep-Dec calendar call spreads over the last couple of weeks. This means people are selling September calls and buying December calls. The idea of this trade is to create slightly longer-term exposure to BTC while subsidizing the trader’s cost basis by selling options (and earning a premium). Typically, one would sell an near-term option they believe will expire worthless and buy a long-term options they think will give them outsized returns.