Bitcoin and Ether Rally: Options Activity, Positioning, and Volatility
Summary
This monthly market report reviews the late-2020 bitcoin and ether rally alongside exchange activity, options turnover, open interest, put-call ratios, and implied volatility. It reports substantial growth in trading and options open interest, with December accounting for a large share of both assets’ outstanding options. The report also notes that implied volatility rose sharply during November and that the volatility term structure changed from upward-sloping to downward-sloping within days.
The put-call ratios differed by expiry: nearer-term contracts showed more put activity relative to calls than contracts expiring in the following year. The authors interpret this as evidence of hedging around the possibility of a post-high sell-off, while also describing a market-implied probability of bitcoin exceeding a price threshold by month-end. These figures document market conditions rather than establish predictive signals. The report is a dated exchange summary, and its bullish sustainability assessment is an expectation, not a demonstrated result.
Key ideas
- The report connects a strong crypto price rally with higher options volumes and open interest.
- Put-call ratios suggested relatively greater near-term hedging than in later expiries.
- Implied volatility increased for both bitcoin and ether during the month.
- The volatility term structure shifted rapidly from upward-sloping to downward-sloping.
- Exchange statistics and market-implied probabilities describe that period and do not validate a forecast.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.