In this week’s edition of Option Flows, Tony Stewart is commenting on market fear, seller of jun25 36k put and buyer jun25 50+52k calls.
While Put Skew still confirms market fear sentiment, subtle changes over the last 48hrs have inferred softening.
Seller of Jun25 36k Put, buyer Jun25 50+52k Calls, protection bought via efficient non-catastrophe Put spreads (rather than naked Puts), have led to Vol+Skew lower.
2) Option flows still mixed, but a clear move from total fear of the downside/unknown.
Calls+Puts bought and sold, no clear direction. However, interpretation is one of more protective rather bearish, with a little optimism thrown.
IV hit hard from highs, now drifts: range chop.
3) The BTC term-structure has moved to contango, supporting a lower expectation of immediate large moves.
But ETH structure is flat, with only slight signs of tipping over at the front.
Implied Vol is relatively stronger, but trading at a healthy discount to 10d +1m Realized.
View Twitter thread.