Deep OTM Bitcoin Options Signal Volatility Plays, Not Bearish Bets
Traders are increasingly targeting deep out-of-the-money (OTM) bitcoin options with longer-dated expiries, reflecting bets on volatility rather than directional price moves.
On Deribit, the $20,000 strike put for June 2026 ranks as the second most popular option, with notional open interest exceeding $191 million. Other active OTM puts for the same expiry include $30,000, $40,000, $60,000, and $75,000 strikes. These contracts, far below bitcoin’s current price near $90,500, are cheaper than options closer to the spot.
While deep OTM puts are often interpreted as bearish hedges, current flows include high-strike calls above $200,000, suggesting traders are positioning for extreme price swings rather than a crash. “These are essentially cheap lottery tickets on a potential volatility explosion over the next six months,” said Sidrah Fariq, Deribit’s Global Head of Retail.
Fariq noted that these “deep wing” trades allow institutions to manage tail risk and capture asymmetric payoffs. If BTC moves sharply in either direction, holders of both OTM puts and calls could profit significantly, though flat markets would quickly erode their value.
The crypto options market, including products tied to BlackRock’s IBIT ETF, has evolved into a sophisticated arena where institutions manage risk and profit from volatility, time decay, and price movements. Despite these dynamics, BTC puts still trade at a premium to calls, partly due to call overwriting strategies that enhance yields on spot holdings.
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