500 bearish bitcoin option contracts with expiration on December 31 and an execution price of $22,000 were concluded using the Paradigm institutional platform through the Deribit exchange on Sunday. The buyer took the same number of contracts with an execution price of $20,000.
"There was an interest in buying bitcoin puts with a December expiration in a significant amount," said Darius Sit, CEO of the Singapore trading firm QCP Capital – " There was also a significant interest in selling September puts."
With a high degree of probability, these contracts were bought by a large investor who seeks to hedge his long position on the spot or futures market with their help. A put option gives its holder the right to sell a set amount of the underlying asset to the seller at a fixed strike price in the future. Thus, the owner of the contract takes a bearish position, but can also use it as insurance to receive a payout if his main bet on the spot market does not justify itself. Especially interesting in this regard are options deep out of money, as in the example under consideration, since they allow relatively cheap insurance against the most negative scenario.
In general, bullish expectations regarding the long-term prospects of bitcoin prevail among the participants of the options market. The price ratio of put/call options on six-month contracts remains on the side of the latter. Nevertheless, bearish rates are currently in the greatest demand for weekly, one-month and three-month contracts.
Bitcoin fell by 3.5% today and as a result was below the important support line at the 50-week moving average of about $32,250. CoinDesk analyst Omkar Godbol admits that if the exchange rate falls below $30,000, traders who sold bonds with a corresponding strike may try to hedge short positions on the spot or futures market and thus accelerate the fall.