Bitcoin Options Flow: Shifting Sentiment, Skew, and Volatility in July 2022
Summary
This weekly options-flow commentary tracks changing Bitcoin market sentiment across two July updates. In the first, it describes cautious positioning: traders bought short-dated out-of-the-money puts, sold at-the-money upside call spreads, and maintained limited upside exposure. Put skew had retreated from extreme levels but remained elevated, while implied volatility held firm despite falling realized volatility. The author interprets sales of in-the-money call spreads as potentially consistent with mildly lower spot prices or declining implied volatility.
The later update reports a shift toward upside exposure as spot recovered. Traders bought near-term calls and longer-dated call spreads, while some strangle selling and profit-taking contributed to lower implied volatility. The note also highlights how implied volatility paid versus implied volatility received affected a call trade’s result. These are observations and interpretations of selected flows, not a complete market dataset or a tested strategy. The commentary does not establish that the cited positioning predicted subsequent returns, and its dated, qualitative account should not be treated as current market guidance.
Key ideas
- Early July flow included short-dated put buying and sales of upside call spreads.
- Put skew eased from extremes, while implied volatility remained resilient as realized volatility fell.
- After spot recovered, the commentary observed increased call buying and longer-dated upside exposure.
- Strangle selling was associated with lower implied volatility, and volatility paid versus received affected trade outcomes.
- The flow descriptions are selective observations, not evidence of a tested predictive strategy.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.