Everyone thinks a massive options expiry means billions are about to crash the market, but actually most traders are completely misreading the data.
Panic-selling your bag right before a major expiry is an easy way to get chopped up and lose money to unnecessary fear. You see alarming headlines and assume a massive sell-off is guaranteed.
Think of it like placing a security deposit on a rental car rather than buying the whole vehicle. When people see headlines about an $18B expiry across $BTC and $ETH contracts, they assume eighteen billion dollars of liquid capital is about to exit the market. That is simply not what notional value means.
Deribit settles inverse options based strictly on their intrinsic value at expiration. Traders are not forced to buy or dump the full underlying position on the spot market, and only the net difference gets settled between parties. The actual capital changing hands is just a fraction of that headline total.
How do you usually adjust your strategy when a massive expiry date approaches?
#CryptoTrading #Bitcoin #RiskManagement
Panic-selling your bag right before a major expiry is an easy way to get chopped up and lose money to unnecessary fear. You see alarming headlines and assume a massive sell-off is guaranteed.
Think of it like placing a security deposit on a rental car rather than buying the whole vehicle. When people see headlines about an $18B expiry across $BTC and $ETH contracts, they assume eighteen billion dollars of liquid capital is about to exit the market. That is simply not what notional value means.
Deribit settles inverse options based strictly on their intrinsic value at expiration. Traders are not forced to buy or dump the full underlying position on the spot market, and only the net difference gets settled between parties. The actual capital changing hands is just a fraction of that headline total.
How do you usually adjust your strategy when a massive expiry date approaches?
#CryptoTrading #Bitcoin #RiskManagement
