Bitcoin is heading into one of the year’s biggest options settlements, with $15.9 billion in BTC contracts and $2.1 billion in Ether options scheduled to expire Friday. The nearly $18 billion combined expiry could influence dealer hedging and add volatility to the market.

The contracts are set to settle at 8:00 UTC, according to Deribit CEO Luuk Strijers. Bitcoin was trading around $84,277, while Ether was near $2,663.

The Bitcoin settlement represents roughly 37% of Deribit’s $43.5 billion in outstanding BTC options open interest. Each options contract represents one BTC or ETH, while open interest reflects the dollar value of active contracts.

Strijers said the Sept. 25 quarterly expiry is among Deribit’s largest of the year. The September BTC options book is notably call-heavy, with a put/call open-interest ratio of 0.69, indicating that traders have positioned significantly for higher prices.

Calls give buyers the right, but not the obligation, to purchase an underlying asset at a specified strike price. Traders generally use them when anticipating an increase in the asset’s price. Puts offer the opposite exposure and can be used to position for declines or hedge against downside risk.

The crypto options market has expanded sharply since 2020. Traders increasingly combine options with spot and futures positions to express views on direction, volatility and time decay, making major quarterly settlements closely watched events.

$75,000 Marks Bitcoin’s Max Pain

Bitcoin’s max-pain level is around $75,000 for Friday’s expiry, significantly below the current spot price of roughly $85,500. Max pain represents the price at which option buyers would collectively face their largest losses at expiration.

The theory that markets gravitate toward max pain remains disputed, so the level does not necessarily represent a forecast. Deribit nevertheless described $75,000 as a potential “soft magnet” heading into settlement.

The largest concentration of open interest is at the $70,000 strike, where calls are now deep in the money.

About 55% of the $9.4 billion in Bitcoin calls expiring Friday are currently in the money, Strijers said. Most puts are out of the money, leaving roughly one-third of the entire $15.9 billion BTC options book in the money.

A call is in the money when Bitcoin trades above its strike price, while a put is in the money when the underlying trades below its strike.

Deribit Chief Commercial Officer Jean-David Péquignot pointed to $75,000 as a potential downside floor based on the distribution of open interest.

Significant call exposure is concentrated at $85,000, $90,000, $95,000 and $100,000. Large call-condor structures at those strikes are becoming increasingly relevant with Bitcoin trading around $86,000.

Put-based defensive positions are clustered around $60,000, $70,000 and $75,000, creating several layers of downside positioning.

Expiry May Remove a Source of Buying Pressure

The settlement could change Bitcoin’s short-term trading dynamics by removing hedging flows associated with expiring options.

Strijers said dealer hedging of short calls may have supported Bitcoin’s advance through the $80,000-$87,000 range. When dealers are short calls, rising Bitcoin prices can require them to purchase spot BTC to maintain hedges, potentially adding momentum to the rally.

That effect can diminish once the options expire. As gamma exposure and related hedging activity disappear, the price-pinning effect may weaken and short-term volatility could increase.

The resulting shift in market positioning could contribute to a reset of Bitcoin’s recent trading range.

Traders are expected to focus on Bitcoin’s reaction around $85,000 and monitor how positions are rolled into October and December expiries. A rollover involves closing or offsetting an existing options position and opening a similar contract with a later expiration.