On U.S. midterm election day, all six of Ethereum’s most-traded options were put contracts, while expectations for short-term price volatility in Bitcoin and Ethereum rose.
According to CoinDesk’s market analysis dated November 3, put contracts, which are also used to hedge against declines, stood out in Ethereum options over the past 24 hours. At the top of the trading rankings was a put option expiring November 6 with a $1,900 strike price.
This strike price is about 16 percent below Ethereum’s spot price at the time of the report. While heavy trading in the contract does not mean the price will necessarily fall to that level, it shows which downside scenario investors were trading around.
The cost of short-term hedging rose
Implied volatility rose to about 51 percent for the nearest-expiring Bitcoin options. A day earlier, it was around 43.5 percent for contracts expiring November 4. For the nearest-expiring Ethereum options, it reached about 59 percent.
This measure reflects the volatility expectations priced into options; it is not the expected daily price change or the probability of a decline. For both assets, the price premium on short-term put options relative to call options remained higher than for longer-dated contracts. As a result, near-term protection against declines became more expensive.
The picture is more mixed for Bitcoin
Bitcoin’s most-traded contract over the past 24 hours was a call option expiring November 7 with a $78,000 strike price. This differed from the previous day’s rankings, when put options led. Even so, four of Bitcoin’s six most-traded options were still put contracts.
The fact that all of the options on the same list for Ethereum were puts was a notable difference between the two assets.
How are Bitcoin and altcoin prices faring?
In the European trading cited in the report, Bitcoin fell to $76,300 before recovering to about $76,900. Ethereum was around $2,262 in the same market snapshot, up 0.6 percent.
Altcoins were mixed: Aave rose 1.5 percent and Uniswap gained 0.8 percent, while CoinDesk’s memecoin index fell 0.8 percent. Alongside this price action, the options market showed investors preparing for sharper swings ahead of the election results.
Not investment advice.