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Options Traders Brace for Volatility as BNB Nears Record High
In anticipation of volatility, a number in the market are purchasing puts with with strikes in the $550-$650 range.
Updated Jun 4, 2024, 7:50 p.m. Published Jun 4, 2024, 3:41 p.m.
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- BNB is less than 10% away from its record high of $705.
- Options traders remain cautious with purchases of puts with strikes from $550-$650.
- BNB has been performing well due to high participation in Binance Launchpad and Launchpool projects.
Binance's native BNB token is approaching an all-time high of $705 after surging by more than 10% from Sunday's low of $597.
is currently trading at $663 having risen by 6.25% over the past 24-hours, outperforming the CoinDesk 20 Index (CD20) which has marked a 0.23% gain over the same period.
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The token has been buoyed of late by strong participation in the Binance Launchpad and Launchpool platforms, which require users to purchase and stake BNB to earn a share of a newly-issued token. The most recent launch was Telegram-based gaming token notcoin (NOT).
However, with trading volume nears $3 billion over the past 24-hours, options traders are proceeding with caution by purchasing put options with a strike price of $550-$650.
"11,250 BNB options traded, call strikes ranging from $600-$700 and put strikes from $650-$550," PowerTrade's chief commercial officer Bernd Sischka told CoinDesk. "Traders are expecting a lot of volatility as prices are pushing towards 2024 highs."
Options are a derivative contract that give the buyer the right to either buy or sell an asset at a set price before the contract expires. Buying call options is seen as a bullish bet whilst the inverse is true on buying put options.
Of the $7.5 million worth of open interest on the BNB options, many of the puts will expire worthless if BNB continues to rise of stays at its current level.
