The debut of BlackRock’s Bitcoin ETF options marked a significant milestone, with the first day witnessing an impressive trading volume of nearly $1.9 billion in notional value. Jeff Park, the Head of Alpha Strategies at Bitwise Invest, shared his in-depth observations via social media, highlighting some key insights from this historic trading day.
BlackRock’s Bitcoin ETF Options: Day One Highlights
Park noted the early establishment of a “volatility smile” by 9:45 AM, which only expanded as trading progressed. “Throughout the day, the smile widened, ending with elevated wings,” he observed.
Volatility Analysis and Market Dynamics
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Referring to data from the BVIV Index by Volmex Finance, Park pointed out that the implied volatility (IV) movements diverged from Bitcoin’s price trends. “Interestingly, the IV did not align predictably with the upward and downward shifts in BTC’s price,” he added.
The most actively traded contract was the 01/17/24 C55 call option, surpassing 40,000 contracts and exceeding the 25,000 position limit. Park commented, “The 25k limit is insufficient given the deep liquidity that IBIT has demonstrated.”
Lottery Tickets and Trading Opportunities
Park was particularly fascinated by the 12/20/24 C100 call option, which he described as akin to “a true lottery ticket.” Trading at a striking implied volatility of 105% and a delta of just 3%, the option saw significant volume early in the day. “A serious investor initiated heavy buying at 10 AM, increasing the price and implied volatility,” he explained, noting it as the day’s largest vega opportunity.
The overall put/call ratio was approximately 0.23, indicating a strong preference for call options. “Even more intriguing is the segmentation by expiry date,” Park stated, noting that longer-term contracts, like those expiring in January 2026/2027, had a put/call ratio as low as 0.08, signifying an extremely bullish outlook.
MicroStrategy’s Resilience Amid New Options
Despite the launch of IBIT options, MicroStrategy’s (MSTR) options trading remained robust. “MSTR’s volatility diverged from Bitcoin, ending higher than it began,” Park remarked, underscoring the unique appeal of MSTR to investors.
Looking forward, Park mentioned the forthcoming launch of BITB options, which will provide additional opportunities for investors. “This will offer another option chain alongside IBIT, appealing to professional retail investors,” he predicted.
Market Insights from Industry Experts
Bloomberg ETF specialist James Seyffart provided further insights into the trading volumes, noting that the first day saw nearly $1.9 billion in notional exposure through 354,000 contracts, with a call to put ratio of 4.4:1. He suggested these options likely contributed to Bitcoin’s ascent to new all-time highs.
When questioned about positional constraints, Seyffart acknowledged the challenges posed by the 25,000 position limit, attributing it to regulatory concerns over market manipulation. “The SEC and CFTC imposed these limits as part of the approval process,” he explained.
As of the latest update, Bitcoin was trading at $93,404.
