The Bitcoin Options market on the Chicago Mercantile Exchange (CME) saw an exciting surge on Wednesday. Traders and investors made bullish bets, causing a whopping 300% spike in the exchange’s activity.
Information from crypto data service, Skew, showed that investors traded call options worth $48 million on Wednesday. According to Skew, this is the largest daily volume the CME has seen since July 28.
In a recent tweet, Skew revealed that traders took strike prices of $14,000 and $16,000 to expire in December 2020. More traders also took $18,000 and $20,000 strike prices to expire in March 2021. Speaking to CoinDesk, derivatives exchange Alpha5’s founder, Vishal Shah, said that the movement could be quite bullish. Shah, who is also an options trader, said traders might not sell spreads because the current climate has low volatility.
Generally, an option is a derivative contract that traders often use to protect themselves against unexpected price movements, or simply against general uncertainty in the market. Traders use call options, which allow them to sell or purchase an asset at a fixed price, before or on a particular set date.
Skew’s data seems to show that traders expect Bitcoin will pump sometime soon. Prices might go as high as $16,000 but may not pass that level until December ends.
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