Bitcoin Option Flow and Volatility During a Sharp Selloff
Summary
This market note reviews Bitcoin option activity during a volatile trading day. It describes calls bought during an initial rally, later put-skew buying through a risk reversal, and a subsequent wave of fund selling and liquidations. The author contrasts the large spot move with the limited response in options, noting that realized volatility exceeded implied volatility during the episode.
The note also observes that activity was concentrated in expiries under two weeks, as retail traders adjusted and market makers managed near-term strike exposure. Longer-dated options saw little trading despite a sharp move in Bitcoin. The author argues that traders missed opportunities to accumulate gamma while spot moved between the stated price levels and volatility stayed below the stated threshold. This is a brief, event-specific commentary rather than a systematic analysis: it provides no full trade records, pricing methodology, or performance evidence, and its account of the US session includes circulating rumors about government selling.
Key ideas
- Bitcoin spot volatility rose sharply while options activity remained limited.
- The note describes call buying during the rally followed by put-skew demand.
- Fund selling and liquidations accompanied the later market decline.
- Options activity was concentrated in expiries shorter than two weeks.
- The author views the muted longer-dated options response as a missed gamma opportunity.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.