【Massive Bitcoin Options Expire on Friday】
This Friday - Approximately 195,000 Bitcoin, about 14.16 billion USD in options will expire, accounting for over 40% of the total open interest, which is around 42 billion USD, making it one of the largest expiration days of the year. Around half of the options risk in the market is concentrated on this settlement day.
Generally speaking - Delta will hedge against a crash:
Market makers frequently buy and sell in spot/futures to hedge risks.
A few days before expiration → Hedging adjustments become frequent and intense. After expiration → A large number of hedging positions are released → Prices are prone to gaps/spikes.
Major capital reshuffling
After hundreds of billions in capital expires: either roll over or exit the market.
Short-term liquidity fluctuations → Volatility surges.
