While some believe that the BTC bull run may last at least until year-end, some ETH derivatives traders may have a different idea.

The positive sentiment around BTC has resonated throughout the border cryptocurrency market as the price of the leading crypto reached another ATH. ETH also benefited from the bullish sentiment as it handily surpassed $3,000, the highest level since August 2024.

, we noted that some options traders on Bybit have been using $2,700 and $3,600 calls with a year-end expiration for this run. Now, the $2,700 calls have already turned significant profit at the current price level.

While some believe that the BTC bull run may last at least until year-end, some ETH derivatives traders may have a different idea. In this edition of Learn From Smart Money, we’ll follow up on the latest ETH derivatives trading data on Bybit and try to unlock the reasoning behind these traders’ strategies.

Renewed Interest in ETH — But Not Overhyped

As of Monday, Nov 11, 2024, the latest bull run has pumped ETH's YTD gains to about 35% (from the 12% previously mentioned). And yet, it's still behind most of the other major cryptos, such as BTC (83%), SOL (86%) and TON (123%). However, it's clear that the public's interest in ETH has rebounded. Google Trends indicates that the term "ETH" has gained interest in its search engine. 

It's considered a good sign that the general interest in a specific crypto asset has increased. What's more encouraging, however, is that interest in ETH remains relatively low compared to previous cycles — which means that the market is still far from being at an irrational level or 

Figure 1: Google search interest in ETH for the past five years. Source: Google Trends

ETH's ETF capital flows may also support the same stance. Data from CoinGlass for the period from Nov 6–8, 2024 shows ETH Spot ETF net inflows of $217.9K, the biggest total since August. Since Spot ETF issuers directly hold the crypto, the capital flow of ETH Spot crypto ETFs is highly correlated with the price, and last week's net inflow aligns with the price actions, just as in August.

Figure 2: Total capital of ETH Spot ETF flows. Source: CoinGlass

Increasing Open Interest From ETH Options and Perpetuals

The strong interest in ETH has also been observed on Bybit, especially in derivatives trading. Bybit's 

 has reached a new monthly high as of Nov 11, 2024, while open interest

 has been hovering near its monthly high.

Open interest is important as data because it tracks the number of active market participants and — to some extent — can reflect the level of willingness of derivatives traders. Besides, a higher level of open interest can also indicate higher liquidity in the market, as liquidity is one of the most important parts of trading. It helps traders enter and exit a trade at the desired price with minimal 

Learn more about the difference between open interest and trade volume 

Figure 3: Open interest and volume of ETH Options on Bybit. Source: Bybit

Figure 4: Open interest and volume of ETHUSDT Perpetuals on Bybit. Source: Bybit

Although macro data suggests that overall interest in ETH has been increasing, the number of holders with short positions on ETH Perpetuals has also slowly been growing. 

Figure 5 (below) shows the daily long/short ratio of ETHUSDT Perpetuals on Bybit. The number of holders with net short position has been increasing since Nov 7, 2024, and has stabilized at around 23% (of the net long account number). 

While not alarming, a continuation of the increase in the net short account number could mean a turnaround of the bullish momentum. Thus, ETH Perp traders should closely monitor the development of this data.

Figure 5: Long/short ratio of ETHUSDT Perpetuals on Bybit. Source: Bybit

Some Options Traders Are More Bullish, Some Maybe Less

Options have been gaining popularity among ETH derivatives traders largely because of their composability and flexibility when it comes to strategy execution. Contracts with a year-end expiration remain ETH speculators' favorite tenor, as contracts with a Dec 27, 2024 expiration have the highest open interest on Bybit.

Figure 6: Open interest of ETH options with a Dec 27, 2024 expiration. Source: Bybit

At the time of this writing (Nov 11, 2024), $3,100 and $3,200 calls — which are already 

 (ITM) — are still sitting with most of the open interest. (“ITM call options" means that the underlying asset's market price is higher than the call option's strike price.) On the other hand, $4,200 calls — which are still out-of-the-money (OTM) — have also received noticeable OI. 

If a trader is bullish on the price of a specific asset within a certain time period, they’ll likely use OTM calls with a specific expiration to speculate on that asset. In ETH's case, ETH bulls are expected to take profit from the $3,100 and $3,200 calls and rotate to calls with higher strike prices to maximize the opportunity. We’ve already seen some of these rotations toward $4,200 calls.

However, if there's no significant open interest increase in ETH calls with higher strike prices in the coming days, it could be a sign that options traders believe that the momentum of the ETH rally may need a break.

Figure 7: Open interest of ETH call options with a Dec 27, 2024 expiration by strike. Source: Bybit

Let’s move on to the puts with year-end expiration. The $2,000 strike price remains the most popular choice among ETH options traders. With the current market momentum, the chance of ETH dropping to $2,000 by the end of the year is unlikely. However, having those puts could be part of a downside protection strategy, such as a 

Learn more about options strategies in the 

Figure 8: Open interest of ETH put options with a Dec 27, 2024 expiration by strike. Source: Bybit

While the crypto market is currently in a state of euphoria, certain macro events should be on the watchlist, including the upcoming U.S. economic data and U.S. Fed Chair Powell's speech after the FOMC meeting. With these developments, the crypto market is expected to get more clarity on the pacing of future rate cuts. 

: Investing in cryptocurrencies and their derivatives involves substantial risk of loss, and isn’t suitable for every investor. This article provides facts for educational purposes only, and does not represent any financial advice. Prior to making any investment decisions, please ensure you fully understand the risks involved and seek independent advice if necessary. Our customer support team is available to assist you with any inquiries.

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Learn From Smart Money: Derivatives Data shows Divided Views on ETH as ETF Recorded Strong Inflows

Crypto options give traders the right to buy or sell an underlying crypto asset at a specified price and date. Discover how to get started trading crypto options on Bybit.

Crypto options are derivatives contracts that give traders the right to buy or sell an underlying crypto asset at a specified price on a predetermined date. They offer flexibility without requiring holders to own the underlying asset.Bybit offers various expirations and USDC-settled contracts, making crypto options trading accessible and straightforward.

 are contracts that give you the right, but not the obligation, to buy or sell a cryptocurrency, such as Bitcoin (BTC) or Ether (ETH), at a specific price in the future.

People use crypto options for two main reasons: to make money if the price goes the way they predict, or to protect their positions if the price goes against them. 

Since traders aren’t buying the actual crypto itself, crypto options are seen as a flexible way to take advantage of market ups and downs. That’s why many traders use them to manage risks or gain exposure using 

To understand how crypto options work, let’s go over some basics.

Strike Price and Key Terms: ITM, ATM and OTM

 is the price at which you can choose to 

There are three terms used to describe a strike price’s relationship to an asset’s current market price:

Options come in two basic types: calls and puts.

In addition to buying call and put options, traders can also sell them. Briefly, here’s how it works.

Crypto traders use options to leverage their market positions while managing risk in the volatile cryptocurrency market. Options provide traders with the ability to speculate on price movements without the need to own the underlying asset directly. They also serve as an essential tool for hedging, as traders can protect their portfolios against adverse price movements. For instance, if a trader holds a significant amount of Bitcoin (BTC), they might buy put options to guard against a potential price drop. 

Additionally, options allow traders to use less capital as compared to buying cryptocurrencies outright, providing leverage that can amplify gains. Moreover, options strategies such as writing covered calls (see below) can generate income on one’s crypto portfolio.

Which Crypto Options Can You Trade on Bybit?

. With options, you can get exposure to these assets without buying them directly.

Bybit's options are USDC-settled. This means any profit or loss is calculated in USDC (a stablecoin pegged to the U.S. dollar), making transactions simpler and obviating the need for actual crypto transfers.

Any gains or losses directly affect your account balance without the hassle of holding the underlying asset. You can focus on your trading strategy while enjoying a straightforward settlement process.

Bybit offers a variety of expirations to suit different trading styles, from short-term plays to long-term positions. You can choose from daily, bi-daily, tri-daily, weekly, bi-weekly, tri-weekly, monthly, bi-monthly and quarterly expirations. This allows each trader to adapt to market conditions, as well as their personal trading strategy, whether they’re after quick gains or looking to hold out for larger trends over time.

Getting started with crypto options trading on Bybit is simple and intuitive, whether you’re a beginning trader exploring options for the first time or an experienced trader looking to refine your strategies. 

 is ready, the next step is to fund it with crypto or fiat currency. Head to the 

Note that as Bybit’s options contracts are settled in USDC, you have to transfer USDC as margin to trade options.

Step 2: Access the Options Trading Platform

In this guide, we’ll show you how to trade Bitcoin options.

On your desktop, navigate to Bybit’s options trading platform by selecting 

The options chain is a central feature where you’ll find available contracts, categorized by expiration dates and strike prices. You can choose from a wide range of expiration dates, including daily, bi-daily, tri-daily, weekly, bi-weekly, tri-weekly, monthly, bi-monthly and quarterly expirations. 

Bybit offers two types of options: calls and puts. Select a 

 if you expect Bitcoin’s price to rise, or a 

Calls are displayed on the left side of the options chain, while puts are on the right side, with strike prices listed down the middle.

Step 5: Choose Your Strike Price and Expiration Date

Pick the strike price and expiration date that best match your trading strategy. For example, if you believe BTC’s price will increase over the next week, you might select a weekly call option at a strike price near its current market value.

Once you’ve selected a contract, choose your desired strike price. This will open an order placement window in which you can enter key trade details like the following:

If you’re trading Bitcoin options, you’ll see additional details, such as implied volatility and 

 (delta, gamma, etc.), which can help you evaluate potential risks and rewards.

After you’ve reviewed your order details, click on 

A confirmation window will appear, showing a summary of your trade. Click on 

 and your options order will be submitted.

When it comes to crypto options trading, it’s essential to have a strategy. Here, we’ll briefly go over a few beginner-friendly strategies that are popular among traders.

How to Use Bybit's Option Strategies Feature

 feature makes it easy to execute various options strategies in just a few steps.

Step 1: Access the Options Strategies Feature

 at the bottom of the screen, then select 

Each strategy card has an introduction, a profit and loss (P&L) graph and key metrics, such as maximum profit and margin requirements.

Bybit provides two modes to set up your options strategy: 

Default Mode (Recommended for Beginning Traders)

In Default Mode, Bybit automatically selects the coin, strike price and expiration date, based on current market conditions.

: In Default Mode, parameters such as strike price and expiration date are automatically set, and cannot be changed.

Pro Mode offers greater flexibility, allowing you to customize your strategy parameters.

Once your strategy is configured, click on 

After creating a strategy, you can track it under 

Confirm the strategy information, then click on 

 to close it. The strategy will close as a market order.

In cases of extreme market conditions, lack of liquidity may impact the ability to close the strategy, so be mindful of market conditions when exiting.

Intermediate

crypto options trading.png

How to Get Started With Bybit Options Trading

Data shows that derivatives traders on Bybit have been setting up for short-term market volatility, while things could be relatively stable toward year-end.

 hit a fresh all-time high as traders and investors braced for the outcome of the U.S. elections and the upcoming interest rate decision from the Fed. As our 

 highlighted, the rising odds for a Republican presidency have increased volatility in Treasuries and equities, suggesting significant market implications depending upon election outcomes. Data shows that derivatives traders on Bybit have been setting up for short-term market volatility, while things could be relatively stable toward year-end.

 derivatives traders have been focusing on the upcoming macro events, and the U.S. elections are front and center, dominating news headlines globally. Despite the price of BTC remaining in its multi-month range, data shows that traders have been keen to bet on BTC's potential price movement after the U.S. elections. 

 page indicates that most of the open interest in BTC options was has been on contracts with a Nov 8, 2024 expiration.

Figure 1: Open interest by expiration of BTC options on Bybit. Source: Bybit

Figure 2: Open interest by strike of BTC call options with Nov 8, 2024 expiration on Bybit. Source: Bybit

Among the calls, the $75,000 strike price seems the most popular choice, while $73,000 and $71,000 have also seen notable open interest. This could mean that some traders are betting on the price of BTC soaring above $70,000 or potentially hitting $73,000 right after the U.S. elections.

The picture seems clearer when looking at the puts. With the same expirations, most of the open interest has focused on puts with a $68,000 strike, and puts with a $62,000 strike have also received plenty of attention.

So, how can we interpret this overall? At the time of this writing (Nov 5, 2024), BTC has been trading around $68,700 on Bybit. Calls at a $73,000 strike with a Nov 8, 2024 expiration may be considered aggressive, while $68,000 puts with the same expiration could be considered reasonable downside protection for the election trade. 

Figure 3: Open interest by strike of BTC put options on Bybit. Source: Bybit

It's worth noting that the implied volatility (vols) of short-dated BTC options has been rising rapidly to over 89% (even realized vols went over 40%), which many consider relatively high. Vols is one of the key components when it comes to pricing options contracts. In a nutshell, the higher the vols, the higher the price of the options contracts, and vice versa. Since the vols of short-dated BTC options have surged to a relatively high level, traders may need to pay a premium if they want to use these options contracts to speculate on BTC prices, which may limit the upside.

Figure 4: Implied volatility of BTC options with Nov 8, 2024 and Nov 29, 2024 expirations on Bybit. Source: Bybit

Figure 5: Historical volatility of BTC options on Bybit. Source: Bybit

BTC options trading data on Bybit shows that most open interest on BTC calls with a Nov 29, 2024 expiration has been at a strike price of $75,000 (see Figure 6, below). It seems traders aren’t expecting an imminent bull run by the end of the month. However, since the market is filled with uncertainties, market participants could change their setups anytime.

Figure 6: Open interest by strike of BTC call options with Nov 29, 2024 expiration on Bybit. Source: Bybit

Short-term volatility is almost inevitable in the crypto market amid a series of macro events. Traders are expected to actively make trades shortly after the U.S. presidential election results are confirmed. Also, the market could reassert the pacing of the rate-cut cycle from the Fed’s interest rate decision and the press conference afterward. All these events could cause volatility in the crypto market, especially for BTC. That's why trading derivatives can offer leverage and, at the same time, downside protection — and that's exactly what traders need during a volatile market. Follow Bybit 360 and Bybit Options for more insights.

Disclaimer: Investing in cryptocurrencies and their derivatives involves substantial risk of loss, and isn’t suitable for every investor. This article provides facts for educational purposes only, and does not represent any financial advice. Prior to making any investment decisions, please ensure you fully understand the risks involved and seek independent advice if necessary. Our customer support team is available to assist you with any inquiries.

NOV24_R4_Learn From Smart Money_ BTC may Retest the Previous High Amid Macro Events but What’s Next_.png

Learn From Smart Money: BTC Reaches a Fresh ATH Amid Macro Events, but What’s Next?

BTC and SOL have snapped 60% YTD gains so far, any chance for ETH playing a catch-up?

The sentiment of the broader cryptocurrency market has turned positive as the price of BTC cleared its March 2024 highs. With the current momentum, BTC could be paving the way for reaching a new all-time high. So far, BTC and SOL have snapped 60% YTD gains. However, ETH only gained about 12% in the same period. 

, we emphasized that ETH may need a break before another attempt to push higher. Since the article was published, the price of 

 contract has retracted from around $2,600 to nearly $2,300 before rebounding.

This edition of Learn From Smart Money will continue to dig into the derivatives trading data on Bybit to explore the possibility of ETH catching up to its peers by the end of the year.

Crypto market sentiment has improved noticeably as recent BTC price actions have renewed traders' interest in the asset class. The 

Figure 1: Crypto Fear & Greed Index and the global crypto market cap. Source: Bybit

Derivatives traders' interest in ETH has increased in addition to that for other major tokens, especially in the options market. Figure 2 (below) indicates the open interest and trade volume for ETH options on Bybit, as open interest reached a fresh monthly high (highlighted in the red circle). This could indicate that traders are more willing to use options contracts to speculate on the price of ETH, potentially reinforcing the current momentum or hedging their existing positions using options.

Figure 2: Open interest and volume of ETH options on Bybit. Source: Bybit

Strong momentum has also been seen in the ETH perpetual contracts market, as open interest reached the highest level in almost a month. Although perpetuals, futures and options contracts are widely used by professional traders and institutions, there are some key differences between the three. (Please read the article entitled 

 on Bybit Learn for more information. Also, check out 

 to learn more about trade volume and open interest in derivatives trading, and why these are essential.) 

Figure 3: Open interest and volume of ETHUSDT Perpetuals on Bybit. Source: Bybit

As we dive into ETH options trading data, it’s evident that the ETH options market has gotten more attention, and options traders are setting up for a year-end trade as contracts with a Dec 27, 2024 expiration have the highest open interest. This could mean that traders have been betting on the potential price actions of ETH, and these movements could be realized by the end of the year. It's also worth noting that contracts with a Nov 1, 2024 expiration received the second-highest open interest on Bybit, implying that some traders are also making short-term speculations with options.

Figure 4: Open interest by expiration of ETH options on Bybit. Source: Bybit

Exploring how options traders pick their contract strike prices could provide another clue. According to Bybit's 

 page, among all the ETH calls with a Dec 27, 2024 expiration, most of the open interest has been on contracts with strike prices at $2,700 and $3,600, as shown in Figures 5 and 6 below. 

Figure 5: Open interest by expiration of ETH options on Bybit. Source: Bybit

Figure 6: Open interest by expiration of ETH options on Bybit. Source: Bybit

The implications could be twofold: On the one hand, some traders seem more conservative by just picking $2,700 calls with a year-end expiration. At the time of this writing (Oct 31, 2024), ETH has been trading at around $2,600. In other words, there's a good chance that these calls could eventually turn 

On the other hand, some traders seem more optimistic by selecting $3,600 strike price calls with the same expiration date. If these calls became ITM, it could mean a potential 35% upside on the spot (or even higher with leverage using derivatives).

Figure 7: Open interest by strike of ETH options with a Dec 27, 2024 expiration on Bybit. Source: Bybit

Now, let's look at the puts. Most of the open interest among the year-end expiration ETH options contracts was on puts with a $2,000 strike price. While many may consider $2,000 to be one of the key psychological levels for ETH, the likelihood of reaching that level by the end of the year seems relatively low. This could in fact be part of the hedging strategy from options traders. Visit the 

While the market is embracing upcoming macro events, such as the upcoming elections and job reports in the U.S., and the upcoming Fed meeting in early November, market volatility could soon increase. From an 

 perspective, it seems that the current level is relatively low, since implied volatility is one of the key elements in options pricing. In simple terms, the higher the implied volatility, the higher the prices of the options contracts. In ETH's case, the current levels may be considered favorable because implied volatility is expected to go higher for ETH options.

Figure 8: Historical volatility of ETH options on Bybit. Source: Bybit

Options trading is highly systematic. That's one of the reasons professional traders and institutions have been using options as a major vehicle to trade both crypto and traditional assets. By observing the options trading data, users can see how professionals have been setting up their trades, and learn about their logic and rationale. Follow 

OCTR4_R87_Learn From Smart Money_ The Case for ETH Playing Catch Up_.png

Learn From Smart Money: The Case for ETH Playing Catch-Up

Derivatives trading data shows that traders can expect the rally of ETH to pause here before another attempt to break higher.

 over the weekend and gained about 2% on the back of thin liquidity. While speculators may be betting on a price breakthrough for ETH, derivatives trading data shows that traders can expect the rally of the second-largest market cap crypto to pause here before another attempt to break higher. This article will dive into the trading data of ETH derivatives on Bybit, and provide some trade ideas for 

Open Interest in ETH Derivatives at High Levels

ETH has received much attention, as the weekend rally may have caught some traders by surprise. Derivatives traders have been showing interest in betting the price movement of ETH with 

 contracts even before the weekend rally. Data from Bybit shows that 

Figure 1: ETHUSDT Perpetual open interest on Bybit. Source: Bybit

Figure 2: ETH options open interest on Bybit. Source: Bybit

, open interest is an important indicator because it tracks the number of active market participants and, to some extent, reflects the level of willingness of these professional traders to make trades at a specific time.

Despite traders' increasing interest in speculating on the price of ETH, the perpetual long/short ratio may indicate a rather neutral stance with a downside bias. 

When we look at the past performance of the ETHUSDT perpetual daily long/short ratio, especially in early October and mid-October 2024 (highlighted in Figure 3 below), there were two clear spikes in the long/short ratio during the highlighted periods, indicating a higher percentage of long accounts over short accounts.

Figure 3: ETHUSDT perpetual daily long/short ratio on Bybit. Source: Bybit

Now, look at the price of the ETHUSDT Perpetual contract on Bybit (shown in Figure 4 below). When the long/short ratio shows a confirmed uptrend, the price seems to follow suit shortly after. However, the recent daily long/short ratio has been relatively flat and has yet to produce any trends. This may indicate that the upside momentum has been slowing down, and the rally may need a break.

Figure 4: ETHUSDT Perpetual daily chart. Sources: Bybit; TradingView

Technical indicators also support this assumption. After the price hits the upper band of the 

, which technicians consider an overbought signal, the daily 

 line has been moving toward the signal line and potentially moving under it (highlighted in the circle), which also suggests the rally may need a break.

Although there may be a short-term downside bias from the perpetuals data and the technical perspective, some of the options trading data may be able to give a different view. Data from Bybit shows that most ETH options traders have a month-end setup, with most open interest focused on contracts with an October 25, 2024 expiration. Among calls, most of the open interest has focused on the $2,800 strike, and the $2,000 strike has been the most popular among puts.

Figure 5: ETH options open interest by expiration on Bybit. Source: Bybit

Figure 6: ETH call options open interest by strike on Bybit. Source: Bybit

Figure 7: ETH put options open interest by strike on Bybit. Source: Bybit

At the time of this writing (Oct 23, 2024), ETH has been changing hands at around $2,500. When looking at the ETHUSDT daily chart, it’s hard not to notice that $2,800 has been the recent resistance level for ETH. Given that the U.S. elections are less than two weeks away and momentum seems to remain strong in equity, the possibility of a breakout from that resistance level can’t be completely ruled out.

Besides, the max pain of ETH options may also support the case of a short-term correction, rather than a trend reversal. Data from CoinGlass shows that the October 25, 2024 max pain for ETH options remains at $2,600. 

Figure 8: Max pain for ETH options. Source: CoinGlass

In options trading, “max pain” refers to a specific strike price at which most options contract holders (calls and puts) would have the most significant financial loss when the contract expires. It’s the point where option owners (buyers) feel the most pain, while option sellers enjoy the maximum profit. In the traditional finance (TradFi) world, max pain has been an essential piece of information for options traders to adjust their positions and strategy strategically. The same theory also applies to crypto options trading.

The max pain theory suggests that the price of the underlying asset, ETH in this case, has a tendency to move toward the max pain point when options contracts expire. A $2,600 max pain point for ETH is slightly higher than its current price. In other words, derivatives traders seem to expect a capped downside risk for ETH at the current level, while there could be a chance to retest the recent resistance.

Derivatives trading, especially options, can be highly sophisticated and involve complicated strategies. By studying different derivatives trading data, market participants may be able to get a glimpse of what professional traders are thinking about. However, each piece of data provides only one piece of information. Seeing the bigger picture often requires assessing other data in parallel. 

OCT24_R69_Learn From Smart Money_ ETH’s Rally May Need a Break But Upside Risk Remains Intact.png

Learn From Smart Money: ETH’s Rally May Need a Break, but Upside Risk Remains Intact

This article will examine the recent SOL rally and why it could be running out of steam.

 hit its highest value in almost two weeks on Monday, Oct 14, 2024, and has been changing hands at around $150. Besides the meme coin frenzy that’s been driving use of the blockchain, recent derivatives trading data suggests that the current SOL run could be running out of steam. This article will dive into the SOL derivatives trading data on Bybit and provide some trade ideas at the time of 

 contracts has been posing an uptrend and hovering at a recent high. This could mean more derivatives traders are willing to bet on the potential price movement of SOL, which could give its price strong momentum.

Figure 1: SOLUSDT options open interest for recent high. Source: Bybit

Figure 2: SOLUSDT Perpetual open interest showing an uptrend. Source: Bybit

 of this series, we explained why open interest is important as data — and why 

 should know about it. We also recommend the following reading:

Perpetual Long/Short Ratio Shows a Mixed Picture

Although traders seem keen to speculate on the price of SOL using derivatives, the long/short ratio gives a mixed signal, and the upcoming development could be a crucial sign for traders.

Figure 3 (below) shows the recent SOLUSDT Perpetual daily long/short ratio on Bybit. The ratio developed three small uptrends in mid-September, late-September and early October, respectively. The first two uptrends were accompanied by some positive price actions (highlighted in Figure 4, below). Alignment of the long/short ratio and price is widely considered normal, and could mean that traders have placed their bets in the right direction.

Now, we’re looking at the third uptrend (early October). When SOL’s price reached a recent high, the long/short ratio didn’t fully follow suit, which could be a sign that the current SOL rally is running out of steam.

However, it’s important to observe the coming development of the long/short ratio. If the reading rises again, that may support the rally. Otherwise, we may just hit a local top here.

Figure 3: SOLUSDT Perpetual long/short ratio. Source: Bybit

Figure 4: Bybit SOLUSDT Perpetual daily chart. Sources: Bybit; TradingView

Examining key options trading data could be another piece of the puzzle to what traders have been thinking about when trading SOL. Recent data from Bybit shows that SOL put options with a month-end expiration have been gaining momentum, and the $120 strike price seems the most popular choice among traders. On the other hand, $160 call SOL options with month-end expiration seem to be what SOL bulls have picked. 

Figure 5: Bybit SOL call options open interest by expiration and strike price. Source: Bybit

Figure 6: Bybit SOL put options open interest by expiration and strike price. Source: Bybit

How shall we interpret this data? Puts at $120 could mean traders are willing to use relatively OTM puts to bet that the price of SOL could hit $120 or lower before the options contracts expire. In contrast, the bulls have mainly been using $160 calls, which is relatively close to the current SOL price as of Oct 15, 2024. It seems that options traders have been thinking there could be more opportunities to make SOL downside trades, rather than trading it upside.

Implied volatility (IV) also supports this assumption. Figure 7 (below) shows the IV of SOL options on Bybit, indicating that OTM puts have a significantly higher IV than OTM calls, which means that OTM puts are priced higher than OTM calls. 

Since options are usually priced currently, if one side is priced higher than the other, the market has a tendency to move in that direction. However, seeing a complete picture or calling a trade with just a one-day data point is difficult. It’s crucial to observe the data over multiple days and compare different data sets. 

Figure 7: Bybit SOL options implied volatility. Source: Bybit

If you want to learn more about implied volatility and why it’s so important to options trading, 

The recent price actions of SOL have drawn significant attention from traders and speculators. Derivatives such as options and Perpetual contracts could be helpful tools for grasping the opportunities in SOL. However, each data point only provides a small piece of information about the whole picture, and many factors could affect the price of this token in the market.

 Investing in cryptocurrencies and their derivatives involves substantial risk of loss, and isn’t suitable for every investor. This article provides facts for educational purposes only, and does not represent any financial advice. Prior to making any investment decisions, please ensure you fully understand the risks involved and seek independent advice if necessary. Our customer support team is available to assist you with any inquiries.

OCT24_R49_Learn From Smart Money_ Increasing SOL Interest from Derivatives Traders.png

Learn From Smart Money: Increasing SOL Interest From Derivatives Traders

Master the top strategies to boost your trading volume to rack up the rankings in the Bybit WSOT Trading Competition with Bybit Options trading.

It’s that time of the year again! The Bybit 

 has begun — and it’s our biggest annual trading competition yet. With a total prize pool of 10,000,000 USDT (including a luxury yacht, Rolex watch and world-trip tickets up for grabs), Bybit is inviting all beginners and professionals to try their hands at trading crypto. The minimum amount required to participate is 500 USDT in your Bybit Unified Trading Account. 

This year’s WSOT is slightly different, with a focus on leveling the playing field and promoting true trading skill over resource advantage through the use of 

. With a large portion of this year’s WSOT prize pool dedicated to Derivatives trading, you’ll no doubt be wondering about the best way to zip up those rankings and boost your trading volume. To get you started, here are some optimal crypto options strategies to wrap your head around so you can easily dominate the leaderboards.

Altcoins

Blockchain

Crypto

DeFi

GameFi

Indicators

Investing

Metaverse

Memes

Options

Stablecoin

Staking

Strategies

Trading

Web 3.0

Web3 Experts

Live ICYMI

Options

Bybit 360

Learn From Smart Money: Derivatives Data shows Divided Views on ETH as ETF Recorded Strong Inflows

Options

How to Get Started With Bybit Options Trading

Bybit 360

Learn From Smart Money: BTC Reaches a Fresh ATH Amid Macro Events, but What’s Next?

Bybit 360

Learn From Smart Money: The Case for ETH Playing Catch-Up

Bybit 360

Learn From Smart Money: ETH’s Rally May Need a Break, but Upside Risk Remains Intact

Bybit 360

Learn From Smart Money: Increasing SOL Interest From Derivatives Traders

Options

How to Improve Your WSOT Ranking in Trading Volume Using Bybit Options

Bybit 360

Learn From Smart Money: Observing Market Sentiment From Derivatives Data

Bybit Guide

Position Builder: What Is It & How to Efficiently Manage Your Portfolio

Options

Explained: European vs. American Options

Options

Bybit Options Lesson: Understanding Put Options

Options

Explained: Bitcoin Options vs. Bitcoin Spot Trading