Options expiry & "max pain": what it means
This morning, $2.16B of $BTC and $ETH options expired. Here's what that means đ
1ïžâŁ What is an option?
A contract that gives the right (not the obligation) to buy or sell at a set price on a set date. Calls bet on a rise, puts bet on a fall.
2ïžâŁ What is expiry?
The deadline. After it, the contract is settled or worthless. Big expiries can bring extra volatility around that time.
3ïžâŁ What is "max pain"?
The price at which the most option buyers would lose money. Some traders watch it, but it does not pull the price toward it. For $BTC it sat around $84K, while price stayed lower.
â ïž Takeaway: expiry days can be noisy. Don't chase candles and avoid leverage when volatility spikes.
đ§ My take: the expiry is behind us, so now the market looks at ETF flows and macro news again. I keep my eye on $80K as support on $BTC.
Did you trade around the expiry, or stay on the sidelines? đ
#bitcoin #Ethereum #options #Crypto101
Not financial advice.
This morning, $2.16B of $BTC and $ETH options expired. Here's what that means đ
1ïžâŁ What is an option?
A contract that gives the right (not the obligation) to buy or sell at a set price on a set date. Calls bet on a rise, puts bet on a fall.
2ïžâŁ What is expiry?
The deadline. After it, the contract is settled or worthless. Big expiries can bring extra volatility around that time.
3ïžâŁ What is "max pain"?
The price at which the most option buyers would lose money. Some traders watch it, but it does not pull the price toward it. For $BTC it sat around $84K, while price stayed lower.
â ïž Takeaway: expiry days can be noisy. Don't chase candles and avoid leverage when volatility spikes.
đ§ My take: the expiry is behind us, so now the market looks at ETF flows and macro news again. I keep my eye on $80K as support on $BTC.
Did you trade around the expiry, or stay on the sidelines? đ
#bitcoin #Ethereum #options #Crypto101
Not financial advice.