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Bitcoin Traders Pile Into $100K CME Options as Price Climbs Through $93K: CF Benchmarks
BTC blasted through the $90,000 resistance level on Wednesday, defying the dollar strength.
Updated Nov 13, 2024, 4:37 p.m. Published Nov 13, 2024, 4:14 p.m.
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- Bitcoin traders appear to be scooping up the $100,000 call option on the CME, CF Benchmarks told CoinDesk.
- Similar bullish flows are being observed on Deribit.
There seems to be no stopping the bitcoin freight train. The largest cryptocurrency blasted through the $90,000 resistance level, hitting a new record above $93,000 while traders on the Chicago Mercantile Exchange (CME) loaded up on bets that stand to profit on prices rising into six figures.
According to CF Benchmarks, traders are flocking to the $100,000 call option on the CME, a location favored by institutional investors, following the lead of their Deribit-based counterparts. A call option gives the purchaser the right, but not the obligation, to purchase the underlying asset at a predetermined price on or before a specific date. A call buyer is implicitly bullish on the market.
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"Per CF Benchmarks' data, the 30-day constant maturity 25 delta skew has now breached the 5 vol threshold, a near YTD high, which implies that there is much greater demand for upside exposure," Thomas Erdösi, head of product at CF Benchmarks, told CoinDesk in an email.
The 25 delta skew measures the relative richness of call options relative to puts, providing a glimpse of the market sentiment. A positive reading, in this case, the 5 vol (volatility) threshold, indicates that calls are pricier than puts, which give the right to sell at a set price, and traders are preparing for BTC to rise even futher.
Strikes above $100,000 are also witnessing a surge in demand, as evident from the elevated implied volatility for these options, CF Benchmarks data shows. CME's derivatives track CF Benchmarks Bitcoin Reference Rate – New York (BRRNY) variant.
The bullish positioning is consistent with the offshore giant Deribit, where traders have been piling into the $100,000 call option since at least late September.
Bitcoin's rally seems to be ignoring the continued rise in the dollar index. BTC prices have surged over 36% since pro-crypto Donald Trump's victory in the U.S. presidential election held on Nov. 5.
UPDATE (Nov. 13, 16:36 UTC): Updates prices; adds record price to headline.
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