$6.5 Trillion Options Expiration Could Spark Crypto Market Boom
The upcoming trading session will see the expiration of trillions of dollars of options contracts, including those related to cryptocurrencies. The event is expected to have a major impact on global financial markets, especially the cryptocurrency market, which has remained calm due to the hedging strategies of large traders.
This expiration date is not just the end of a term, but also an important push for investors to expand new positions. In fact, this is the biggest option cooperation period of the year, creating conditions for strong breakouts or corrections in derivatives markets, including the cryptocurrency market.
Defensive strategies of brokers and market makers
Against the backdrop of large investor survival campaigns, brokers and market makers have adopted hedging tactics, creating a “squeezing” effect on the price range. Put options contracts around the 6,000 price level of the S&P 500 index, associated with hedging strategies, have kept the market stable for a long time.
This has a big impact on how brokers handle risk, especially in low volatility markets. The market during this period is maintained in a state of “positive gamma”, meaning traders are mostly selling when the market is rising and buying when it is falling, helping to absorb the volatility.
The Effect of Expiration Date on Price Volatility and Cryptocurrency Trading Strategy
Expiration dates are more than just regular trading days. Cryptocurrency traders pay special attention to such events because they can trigger unexpected moves, as options contracts are liquidated at the same time, reducing the “pinching” effect and opening up new opportunities for short-term trading strategies.
An estimated $5.8 trillion worth of options on indexes, individual stocks, and ETFs expire on that day, with options on index futures being the largest, allowing investors and crypto traders to make aggressive bets or adjust their positions based on the latest market trends.
Risks and opportunities after maturity
After this point, if options contracts are liquidated en masse, the market may experience large, unpredictable fluctuations. This requires crypto investors to be prepared to adjust their strategies, take advantage of opportunities, or mitigate risks from sudden shocks.
This event will undoubtedly lead to a new trend in the market, opening up the possibility of a sharp increase or a sharp correction for cryptocurrencies. This is the time for savvy investors to consider taking advantage of long-term positions or effectively hedging risks, while predicting the movement of the cryptocurrency market in the coming weeks.
Source: https://tintucbitcoin.com/electronic-selection-contract-is-about-to-be-commissioned/
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