Bitcoin (BTC) Options Trader Pays $1M Premium on Bet for Volatility Surge
An investor recently made a significant options trade on Bitcoin, known as a long straddle, by paying a net premium of over $1 million to purchase 100 contracts of call and put options with a strike price of $66,000 expiring on Nov. 29.
This bold move was confirmed by Lin Chen, head of business development Asia at Deribit, a leading cryptocurrency options exchange.
Options trading involves betting on the future price movements of an underlying asset, in this case, Bitcoin. A long straddle strategy involves buying both a call option and a put option with the same strike price and expiration date, anticipating a significant price movement in either direction.
By making such a large options trade, the investor is expressing confidence in their prediction of a major price swing for Bitcoin by the end of November. This type of high-risk, high-reward strategy can result in substantial profits if the price of Bitcoin moves significantly above or below the $66,000 strike price.
