Deep out-of-the-money (OTM) bitcoin Put options light up in longer expirations as traders pick up cheap lottery tickets for potential moonshot payouts if BTC swings wildly.
On leading crypto options exchange, Deribit, the $20,000 strike is the second most popular of the June 2026 expiration options, with a theoretical open interest of over $191 million.
Nominal open interest is the dollar value of the number of active contracts. Put options at strikes below the prevailing market price of BTC are said to be OTM. These OTM sets tend to be cheaper than those that are close to or above the spot price of BTC.
The June expiration also sees significant activity in other OTM posts at the $30,000, $40,000, $60,000 and $75,000 strikes.
Activity in deep OTM puts is typically read as traders preparing for a price drop. But that’s not necessarily the case here, as the exchange has also seen activity on calls with higher strikes above $200,000.
Taken together, these flows represent a bullish view of prolonged low-cost volatility rather than a bet on price direction, according to Deribit’s global head of retail Sidrah Fariq. Think of it as cheap lottery tickets on a potential volatility explosion over the next six months.
“There are about 2,117 open interests on $20,000 bitcoin set for June expiration. We also saw some big trades in $30,000 puts and $230,000 call strikes. The combination of these far out-of-the-money options does not suggest directional trading, but rather deep wing trades that professionals use to trade long-term with their booktailness,” CoinDesk.
She explained that it is essentially volatility positioning, not price positioning, because the $20,000 put or $230,000 call is simply too far from the spot price to be a purely protective hedge. At the time of writing, BTC was changing hands near $90,500, according to CoinDesk data.
Those who hold both OTM calls and puts can make asymmetric gains from extreme volatility or wild price swings in either direction. However, if markets remain flat, these options quickly lose value.
Options are derivative contracts that give the buyer the right to buy or sell the underlying asset at a predetermined price at a later date. A put option gives the right to sell and represents a bearish bet on the market. A call gives the right to buy.
The crypto options market, including that linked to BlackRock’s IBIT ETF, has evolved into a sophisticated arena where institutions and whales engage in three-dimensional chess, managing risks and taking advantage of price direction, time decay and swings in volatility.
Broadly, sentiment in the options market appears bearish as BTC continues to trade at a premium to calls across all tenors, according to Amberdata’s options risk reversal. This is due at least in part to persistent overwriting of calls, a strategy aimed at increasing returns on top of spot market holdings.
