Bitcoin’s $40000 put becomes second-largest options bet ahead of February expiry next week

This is one of the largest positions in bitcoin’s market ahead of Feb. with a $40,000 put option, which has been named as one among the most important places to be placed before the new currency was launched on Bitcoin. But after an abraising selloff, 27 expiry is showing strong demand for downside protection following ‘bruising sale off’ and the latest has been released.

Options are derivatives that give holders the right, but not obligation, to buy or sell bitcoin at a fixed price before expiry. Unless $BTC falls below a set strike, put options as insurance against price declines.

The $40,000 offer is the second-largest open interest strike, with about $490 million in notional value tied to that level, highlighting appetite for deep tail-risk hedges. As of October highs, $BTC has fallen by as much as half from its $16,000-$66,000 trading position, reshaping across the board as traders hedge against further losses.

According to data from Deribit, the Dubai-based exchange owned by Coinbase, about $7. A 3 billion in bitcoin options notional value expire at the end of the month, according to a statement issued by .

meanwhile, $566 million sits at the $75,000 strike (also known as the max pain level) and $. A maximum number of options expire worthless, reducing payouts to buyers is called max pain. If the spot price is below $75,000, and a move higher into expiry could cut losses for call sellers as they put on their offer.

Call outweigh puts overall, 63.547 call contracts and 45,914 puts; however, positioning is not bullish or just as bully at all (although calls outwigh puts overall) The put-to-call ratio of 0 is set by . A 72. means that upside bets still dominate, but the focus on sizeable put open interest at lower strikes is clearly in demand for downside insurance and this suggests clear demand to take advantage of negative insurance (see below).

Traders retain exposure to a rebound, but are simultaneously hedging against the risk of another sharp leg lower.

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