Ethereum option traders take action as the price of ETH soars to $280


Since the beginning of the week, Ether (ETH) has gained over 17% and the gains appear to be related to increased use of stablecoins and increased DeFi applications.

As reported by Cointelegraph, Ethereum network usage exceeded Bitcoin, doubling the established volume throughout 2019.

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Another possibly upward factor behind this is the final Ethereum 2.0 testing network scheduled for August 4th. This seems to have investors in a good mood, despite the current increase in gas fees. Last week, investors rushed into the options markets, sending Ether’s open interest to a record $230 million.


Strangely enough, some of these options reached an impressive price of USD 720 for the December 25 expiration, which is quite optimistic given that it shows a 160% rise.

6,000 of those call options were traded today, and another 6,000 call options were traded for the September 25 expiration, with prices ranging from $400 to $880. These trades added more than $3.2 million in open interest.

These trades added over $3.2 million in open interest.
What exactly are the odds of the current bets according to the Black & Scholes option pricing model? The exchange, Deribit, presents this information as a „delta“ and these are the percentage based probabilities for each price considering the current implied volatility.

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According to the data above, the $400 price for December has a 34% probability of occurring, while the most traded price of $720 has a very small probability with 11% according to the option pricing model.

For this reason, the price paid for each $720 contract has been around 0.025 Ether. The 6,050 options traded today have cost buyers only USD 42,000, but increased open interest by USD 1.7 million.

The September expiration is even less likely
With just over two months left until September’s expiration, the chances of traders‘ $400 per ETH optimism are less likely.


The same price of $400 now attracts 18% odds according to the Black & Scholes pricing model, while the staggering $720 expiration is only 3%.

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As shown above, options for the September expiration are traded below Etoro 0.03 each, so they should not have the same weight as the more modestly optimistic prices.