Reading Crypto Option Analytics: Skew, Term Structure, Flows, and Open Interest
Summary
This guide explains how to interpret several crypto options analytics views. It defines volatility skew as implied volatility across strikes or deltas, and term structure as at-the-money implied volatility across expiries. Comparing these charts can help traders identify relative pricing differences, though the guide does not establish that apparent richness or cheapness will lead to profitable trades.
It also describes activity breakdowns by calls and puts bought or sold, open interest as outstanding contracts, hourly at-the-money volatility, 30/20 call-put skew, and rankings of large trades. The stated uses include spotting concentrated flows, gauging possible liquidity and exposure concentrations, tracking volatility changes by expiry, and examining large trader activity. These indicators are contextual clues: the text cautions that open interest changes depend on how trades affect positions, and it offers no empirical tests or specific risk controls for strategies built from the charts.
Key ideas
- Volatility skew compares implied volatility across option strikes or deltas, while term structure compares at-the-money volatility across expiries.
- Call and put activity charts can reveal days with concentrated directional option flow.
- Open interest can help locate exposure concentrations, but changes do not identify participant positions on their own.
- Hourly volatility and 30/20 skew charts track changes across time and expiry.
- Large trade rankings provide clues about activity but do not prove its market impact or profitability.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.