In the last three months, option contracts on Crypto Cash have increased fivefold to a total of $452 million.
The $112 million in options expiring this Friday could have a considerable impact on the market, but this will depend on the balance between bullish and bearish strategies.
The chart above shows the significant growth in the ETH options market in the past month.
Although open interest may seem modest compared to the $1.9 billion Bitcoin options market (BTC), ETH contracts have become more significant in recent months.
The $400 strike dominates volumes
Not all option strategies are bullish or bearish. The covered call consists of buying the underlying asset and selling a call option.
The goal in this scenario is to profit from a fixed annuity strategy when a discrete premium is presented. Overall, this is a neutral-positive tactic, and these investors earn as long as Ether remains above a certain threshold.
Although the open interest of options with a strike below $320 is considerable, it may have accumulated more than a month ago when ETH was below $250.
These in-the-money options involve a strike 15% or more lower than the current ETH price, and are generally used in the covered call strategies mentioned above.
Currently there are 97,000 options on Ether with a strike of $400, although this figure includes all expirations up to March 2021. Analyzing only the upcoming expiration of August 28th, it is possible to better understand the true investor sentiment.