Topic: [2021-05-14] Crypto Options Market Makers Starting to Influence Bitcoin Price (Read 52 times)
May 19, 2021, 04:42:36 PM
the market continues to fall, what will this force say to this and what should we all do now except wait for either the purchase price or fix losses? It is obvious that options are only a tool, and the real impact is primarily psychological, provided by such guys as the head of Tesla and some of his colleagues from the People's Republic of China, who publish news that is disappointing for the market. Nobody knows where we will turn, buried in a new bottom.
May 14, 2021, 06:41:43 PM
Bitcoin (BTC) tanked on Wednesday, hitting multi-month lows near $46,000 as renewed fears of an early rate hike by the Federal Reserve, the recent dour mood in financial markets and Tesla’s decision to suspend bitcoin payments were all blamed for the slide.
But the downward move was likely aggravated by options market makers selling the cryptocurrency in the spot/futures market to hedge their books (offset bullish exposure), according to Fredrick Collins, a seasoned options trader and researcher at Glassnode.
“Market makers were heavily short puts in the range of $52,000 to $50,000, and I estimate were forced to sell nearly 2,900 bitcoin during the crash to offset the short gamma exposure,” Collins told CoinDesk in a Twitter chat. “That likely exacerbated the bearish move.”
The episode shows how the growing trade in cryptocurrency options in recent months has become a force to reckon with for participants in the underlying spot market for bitcoin, with monthly expiries proving to be a catalyst for price volatility. According to data source Skew, the options market has exploded in the past 12 months, with the open interest rising from $50 million to over $10 billion.
Readmore https://www.coindesk.com/cryptocurrency-options-market-makers-bitcoin
But the downward move was likely aggravated by options market makers selling the cryptocurrency in the spot/futures market to hedge their books (offset bullish exposure), according to Fredrick Collins, a seasoned options trader and researcher at Glassnode.
“Market makers were heavily short puts in the range of $52,000 to $50,000, and I estimate were forced to sell nearly 2,900 bitcoin during the crash to offset the short gamma exposure,” Collins told CoinDesk in a Twitter chat. “That likely exacerbated the bearish move.”
The episode shows how the growing trade in cryptocurrency options in recent months has become a force to reckon with for participants in the underlying spot market for bitcoin, with monthly expiries proving to be a catalyst for price volatility. According to data source Skew, the options market has exploded in the past 12 months, with the open interest rising from $50 million to over $10 billion.
Readmore https://www.coindesk.com/cryptocurrency-options-market-makers-bitcoin
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