Some bitcoin options traders are making outlandish wagers, betting on a rally to a six-figure price by year end even as the cryptocurrency continues to struggle following last month’s 35% drop. According to data provided by Laevitas, the dominant cryptocurrency options exchange Deribit saw a total of 425 bitcoin call option contracts, with a strike price of $200,000 and an expiration date of Dec. 31, change hands on Thursday. That strike price is roughly five times the current level.
A call option is a derivative contract that gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. Theoretically, buying a call at the $200,000 strike expiring on Dec. 31 is a bet that the cryptocurrency will end the year above that level.
While the trade size is relatively small compared with similar gambles that CoinDesk has covered in the past, the wagers are still interesting for several reasons. To begin with, the $200,000 call options represent a long-term bet, with an expiration date a full six months away. And because the options are so far out-of-the-money (strike well above the spot market price), they are extremely cheap, currently trading at 0.018 BTC ($698) on Deribit.
Bitcoin at $200K by Year’s End? Some Crypto Options Traders Make That Bet, CoinDesk, Jun 14
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