A significant SOL options block trade crossed the band on Deribit via OTC network Paradigm late Monday, suggesting expectations for a price rally to $400 in late February.
The trade, structured as a bull call spread, involved a long position in the $280 call and a simultaneous short position in the $400 call, with 10,000 contracts for each leg and both legs set to expire on February 28, according to block streams tracked by Amberdata. Block trades are large orders usually placed by institutions that are executed over-the-counter (OTC), outside the exchange’s order book.
A bull call spread achieves its maximum profit when the underlying asset’s price is at or above the short call’s strike price, which is $400 in this case. The buyer is betting that the spread will move past $280 and reach $400 with a breakeven around $300, according to Amberdata’s director of derivatives, Greg Magadini.
Importantly, downside risk in a bull call spread is limited to the total premium paid to establish the strategy, protecting the trader from larger losses if the market falls. Currently, SOL is trading at $254 after hitting record highs above $290 over the weekend, according to CoinDesk data.
