This weeks Option Flows with Tony Stewart starts with commentary of the large buyers of OTM options.

July 14

BTC+ETH rangebound while all around there’s activity.

The paradox continues to bring large buyers of OTM options, still heavily biased to upside Calls, playing for a large shift, but ATM volume and commitment lower.

IV steady.

Movement follows inertia, but is not caused by it.

2 / Option vol low but not cheap. 1m IV>RV; 54v29!

Attempts to break the spot range continue to be refuted. But IV has for the moment reached a plateau where large sellers refuse to push.

IV 10d 41%, 1m 54%, 3m 66%
RV 10d 27%, 1m 29%, 3m 61%

No material skew change.
CME torpid.

End / Inexplicable wicks and historic volatility haunt sellers and tempt buyers. This is one reason why IV>RV, as large moves are feasible in BTC. But also the human element – IV would probably be lower if trading desks and risk management were non-human.

Managing risk allows sleep.

Original thread on Twitter can be seen here.

THREAD BY:

EXPLORE DERIBIT TOOLS:

Deribit Position Builder
Understand how multiple positions and the changing value of BTC or ETH could affect your portfolio.

Deribit Testnet
Practice your trading and avoid risking real capital.

RECENT & RELATED ARTICLES: