ETH Options Market Sets New Record And Put-to-Call Ratio Rises


If you read the latest Ethereum news, you probably know that the cryptocurrency is gearing up for its brand new version, ETH 2.0 which is set to be rolled out this July. In the latest updates, we can see that the ETH options market sets new record and the put-to-call ratio in this marketplace also rises.

All of this could mean that some ETH holders are hedging their bets on the second most valuable digital asset right now. The open interest (OI) now shows a put-to-call ratio above 1, which is the highest level since at least April as data from the crypto derivatives analytics provider Skew shows.

eth options put to call ratio

Now, even though a level just above 1 in the crypto news today means that there is roughly an equal amount of trading in both bullish call options and bearish put options, this ratio has been skewed more heavily in the past few months to the bullish side than it is now.

For those of you who don’t know, the ETH options market is useful for large holders of ETH because they give the option (but not an obligation) to either buy or sell ETH at an agreed upon price in the future.

Therefore, the contracts may be used as a form of financial insurance for large holders who want to protect their downside in the event of a major sell-off in the spot market. This would be the same way as an insurance policy protects against large losses in the real world.

eth options open interest
Source: Skew

Data from Skew shows that the ETH options market records an all-time high in open interest, reaching the same level as the Bitcoin options market did in December 2018 – around $200 million in total open interest.

All of this is a new milestone for the Ethereum cryptocurrency – and something that did not go unnoticed by analysts and big commentators. Su Zhu who is the CEO of Three Arrows Capital, recently said that he “can confirm some of the largest ether holders in the world are now active in the ETH options market on Deribit Exchange.” He was vocal on Twitter and this metric is of specific interest to him because his firm is affiliated with the crypto derivatives exchange Deribit.

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