This weeks Option Flows with Tony Stewart starts with commentary of MSTR allocation + Oct-Dec 13k+ Call buying raised hope but has not yet propelled BTC.

September 21

MSTR allocation + Oct-Dec 13k+ Call buying raised hope but has not yet propelled BTC.

Instead, Defi + Macro concerns have weighed on spot.

Spot comfort zone + <1m ATM Put sales and medium-term Call unwinds resulted in Implied vol at 1yr low.

Skew -ve Puts.

Optionality is ripe.

2 / Medium-term >13k strike Call buying has slowed and opposing flow dominates now as a Fund partially unwinds ITM+ATM Calls in Dec over the weekend. Successfully selling 600+ Dec 12k (+200 11k) Calls before today’s spot retrace. Impact to hit 3m implied Vol to low 60%s.

3 / BTC option vol summary:

Constant <1m ATM vol pressure – 10.5-11.5 Put focus

Wknd 3m ATM vol pressure

Recent 1-3m 13k+ Call buying, +ve Call skew

Limited downside Put activity outside far OTM 1week Puts from ‘Red Bull’,

Result – BTC IV at 1yr low, low medium-term Put skew.

End / Therefore, relative opportunities to buy medium-term vol/optionality depending on underlying view and timing.

Downside exposure can be hedged via Puts or Collars. Upside exposure can be gained from ATM Calls+Call spreads.

Comfort zone boundary tests likely to raise nerves +IV.

Original thread on Twitter can be seen here.

September 23

Light option flows as spot holds >congested support, but flow consistent:

Call buyers Oct 12k + Dec13k, low vol, upside exposure,

2-way flow Oct 11k Call,

Put sellers <1m ATM Puts – spot rangebound/upside exposure.

Mkt shrugging off <10k concern – prior hold, with MSTR assist.

2 / Option flow initiators cumulatively considering BTC 10.3-10.5k as a dip – Buying of Call (+spreads), <2m ATM Put selling BTC, OTM medium-term Put selling ETH.

IV low.

Market-makers absorbing flows, becoming generally long 1m+ ATM Puts, -Calls, +delta

End-user complacency <10k?

End / Large OI expiring Sep25th, but significant amount away from current spot. 11k strike still the largest close strike. Option implied vol <40% not indicating any large or choppy trading ahead;.

OTM teeny Puts and Calls bid to short-cover, risk manage, skewed demand to <10k Puts.

Original thread on Twitter can be seen here.

September 25

Sep expiry not the story.

Large restructuring+accumulation of medium-term BTC skew, large block trades, net buying Mar 7k, Dec 9k, Nov 9k Puts, lifting -ve skew, raising implied vol, then near spot highs, net selling Nov 13k, 16k, Oct 14k, Calls.

Post-expiry Option+IV sales.

2 / These new large Put buying flows, were opportunistic of factors highlighted in the last couple threads – medium-term low vol + low skew.

Note similarities to Sep3rd DI thread, Mar8k+Dec9k Puts, +skew pump.

Also, a Nov 10k-9k Put ratio yesterday 1k x1.75k, cf Sep 12-11k Aug3rd!

3 / Yesterday’s Put buying raised vols, but the main impact was Put focussed: Dec9k Puts up from 63% to 69%, while ATM only up 2%. Put buying continued as the market rallied to 10.7k, then large sellers of Calls (likely yield, not vol), Nov 16k x1k, 13k x350, Oct 14k x300, blocks.

End / Post monthly Sep expiry this morning, has experienced large flows consistent with last week, Oct ATM + 10k Puts x500+, Nov 10k Puts x250, both sold, and on top of additional expiry related option selling, BTC>10.3k comfort, and ahead of the weekend, implied vols hit 2-3% ATM.

Original thread on Twitter can be seen here.

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