This weeks Option Flows with Tony Stewart starts with commentary of Day before US election, S&P rallies off lows, but BTC falls.

November 2

Day before US election, S&P rallies off lows, but BTC falls <interest zone at 13350.
Put interest 2way, Put hedges vs Put Structure flow selling.
Calls dominate (+over weekend) on the buy side – Nov3 13750, 6th Nov 13750-14.5k, and again Jan upside – 40k Calls x2k.
Vols firm..

2 / Large trades attract interest and the options market can be an odd place.

Recall Jan 32k $62.42 (84.3%), Jan 36k $39.85 (87.5%) x20000 Friday.

Friday’s Calls were bought vs 13.3k, current spot as a write this.

Now, same BTC spot, Jan 32k $110 (94%), Jan 36k $86.5 (99.5%)..

End / Jan ATM vol up a touch, but interest in upside Calls has increased – Jan 40k Calls bought x2k (103%+ vol), and very little natural flow to give supply to the market, so this area has squeezed higher.

Also seeing vol squeeze in 6th Nov Election week expiry. ATM vol+>10% at 65%.

Original thread on Twitter can be seen here.

November 5

Election uncertainty dissipating, VIX plunge, S&P + BTC strong rally. Big options volume day.
When BTC>14.7k, + again >15.2k. funds started to take profits on ITM Calls, Nov6-Nov27 13-15k 2k+.
Some profits redeployed to keep exposure + new money buying Nov+Dec 15.5-20k+ Calls.

2 / US election probably forced some short-covering Call options + gamma hedges, as there was an absence of forced buyers until 15k; even then, not material to move IV much.

Buying of further OTM calls and a Fund rolling their short Mar16k to Jun18k x1k gestures further upside.

3 / Impact events bring uncertainty which manifests as increased implied vol. Post-event, often whatever the result, uncertainty diminishes and implied vols fall. Hedges and bets are unwound ie selling pressure, into a market less interested to buy any more.

4 / Flow dictates this; it’s not necessarily efficient.

In legacy markets, impact events are infrequent, whereas, within crypto, they are ubiquitous.

Today’s 1k+ BTC move far exceeded IV levels and raw BTC spot territory often pushes IV higher.

So while VIX plunged, BTC IV stable.

End / Action in Puts was 2-way again – some hedging vs sat accumulation. So ITM Call selling combined with continued OTM Call buying, further pumped Call skew on the standard measure.

<15delta Puts are firm though, offering opportunities for those hedging downside via Put spreads.

Original thread on Twitter can be seen here.

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