$SOL SOL, the native cryptocurrency of the programmable blockchain Solana, has experienced a sharp rise for four weeks, increasing by 85% since April 7 - more than double Bitcoin's (BTC) pace - and top options traders are gearing up for more gains.

The token has risen to around $176 in recent days as cryptocurrency and traditional markets have embraced a greater degree of risk. CoinDesk data showed that Bitcoin, the leading cryptocurrency by market capitalization, rose by 40%.

It is unlikely that the gains will reverse in the near future if block traders - primarily institutions and market participants executing large off-exchange trades and outside of the public order book - are correct. They bought the $200 call option for SOL listed on Deribit, expiring on June 27, in large numbers, indicating they expect the price to rise above this level before the end of the first half. Greg Magadini, director of derivatives at Amberdata, said in an email, "Traders also bought $200 futures contracts expiring in June last week. This was the largest collective trading deal, with 50,000 contracts traded for a total premium of $263,000." On the Deribit platform, one options contract represents one SOL value.

A call option gives the buyer the right, but not the obligation, to buy the underlying asset at a predetermined price at a later date. The buyer of a call option is implicitly bullish on the market. It's like buying a lottery ticket, where the holder has the chance to make significant gains if they win, risking only the initial amount paid for the ticket.

Magadini added that these call options were purchased with an implied volatility (IV) of 84%. In other words, the traders' timing is perfect, as they snagged call options when they were cheap, with SOL's average implied volatility typically in the three-digit range.

The data shows that the demand for the $200 call option has left market makers or traders with a significant net negative gamma exposure at the strike price.

Market makers who have a net negative gamma exposure typically buy as prices rise and sell during downturns, aiming to rebalance their portfolios towards a delta-neutral position or market-neutral. Their hedging activities often amplify market volatility.

Thus, volatility is likely to increase as the SOL share potentially surpasses the $200 level.

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