Options markets are showing the nerves (and illiquidity) going into the weekend and the raft of potentials. The Friday vs Saturday IV [implied volatility] Spread is nearly 25 vols wide across the board with Friday expiries missing the expected variance," Jeff Anderson, head of Asia at STS Digital, told CoinDesk.
Implied volatility, a metric derived from the pricing of options, indicates how much traders expect the asset's price to fluctuate over a specific period. Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a predetermined price at a later date.
Early Thursday, options expiring Friday suggested an annualized implied volatility of 56%, while those expiring on Saturday traded at 80% volatility. The 24-point gap indicates expectations for increased price turbulence following Friday's summit.
