Reading Bitcoin Options Flow Through Put Selling and Call Buying

Summary

This commentary interprets a sharp Bitcoin rebound through changes in listed options activity. Traders sold protective puts around $75,000–$78,000 and bought calls with strikes from $85,000 to $100,000 as spot rose from $75,000 to $85,000. The author also describes two-way positioning, including short-call covering and continued rotation in May and June contracts. The shift followed a period of elevated put skew, making calls appear relatively attractive; buying calls and selling puts brought skew back toward flat.

The note tracks implied volatility alongside those flows. Bitcoin’s volatility proxy first fell from 62% to 52% as immediate crash fears eased, then recovered to 57% as some participants bought upside volatility despite realized volatility outperforming implied volatility. The author reads elevated volatility in both Bitcoin and the S&P 500 as a sign that large moves in either direction may persist. This is a short market interpretation, not a tested trading rule: it supplies no full flow dataset, positioning totals, or evidence that the observed trades predict subsequent returns.

Key ideas

• Put selling and call buying marked a shift from defensive to bullish Bitcoin options positioning.
• Call demand and put selling reduced previously elevated put skew toward flat.
• Bitcoin implied volatility initially fell with crash fears, then rebounded as traders bought upside exposure.
• The author expects continued large moves in either direction, rather than a one-way outlook.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.