This weeks Option Flows with Tony Stewart starts with commentary of last weeks forewarned downside.

September 7

Option flows last week forewarned downside concerns as initiators bought Puts across the curve, sold Calls; Put Skew pumped.

<10.5 BTC, 360ETH, Implied Vols increased, BTC 1m hit 70%+, ETH 100%.

Further dated (fund) Put buying ceased; wknd near-term only activity.

Asia quiet.

2 / Sunday+Monday flow so far very light, as spot teeters >10k BTC, 350ETH. Further dated Put buying ceased, but not unwound. Short-medium dated Puts some profit-taking, but sufficient buyers maintaining elevated IV and Skew.

10k level psychological and fears of what lies below.

End / IV vs RV:
BTC RV 10d 80%, 1m 56%,
BTC IV 10d 60%, 1m 65%,

ETH 10d 150%, 1m 106%
ETH 10d 100%, 1m 98%

Near-term options outperformed IV big.

Skew no signs of weakness yet:
ETH+BTC 1m 25delta (Put>Call) now +10% (cf -20% when ETH 480+), illustrates total shift in sentiment.

Original thread on Twitter can be seen here.

September 10

Last few days dominated by fast money, short-dated options in BTC+ETH, maintaining elevated implied vol (BTC 1m >65%, ETH >95%) +put skew (1m P>C ~10%), as Macro + Defi-related hedges (buys+unwinds) focus <2week activity. 1m+ tenors quiet. Volumes+S&P correlation high US time.

2 / Implied Vols hold up (2m+), despite a few days of quieter spot action in BTC, while ETH still volatile.
Conspicuous lack of large yield-enhancing/vol sales.

Cross-product vol dangerous with distinct narratives; that said BTC sellers may be reticent, sighting IV ETH >BTC 25%+.

End / While all Put skew has firmed, such that 1m ~10%, note 2m+ still negative for the Put, so technically better protection vs long spot.

If short-term is a necessity (often due to costs and nearer protection strike), then Put spreads are commonly used with elevated skew+vol.

Original thread on Twitter can be seen here.

THREAD BY:

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