Over $5 billion in Bitcoin and Ethereum options expire today, compressing weeks of risk into a few hours—and the tape rarely walks away unchanged. This is the kind of expiry that can bend liquidity, whip prices around key strikes, and reset the market’s bias into next week. Are you positioned for the volatility window, or about to get pinned with everyone else?

What’s Happening

Weekly options on BTC and ETH roll off in bulk, with open interest concentrated around round-number strikes. When large contracts expire, dealers’ gamma hedges adjust, market makers pull or add liquidity, and price can gravitate toward—or violently reject—high open-interest levels often dubbed max pain. As Raoul Pal put it, a surge of expiring options can “resonate through the crypto market,” and history agrees.

Why It Matters to Traders

Expiries frequently produce: - Temporary liquidity vacuums near big strikes - Fast moves as hedges unwind and re-build - Shifts in implied volatility (IV) term structure - Changes in funding and basis that spill over to altcoins

The immediate risk is a fake breakout into expiry followed by a sharp reversal as positions settle. The opportunity is the post-expiry reprice: when hedging flows fade, the underlying trend often becomes clearer.

Levels and Timing to Monitor

Focus on clusters of open interest around key round numbers on BTC and ETH. Track IV, skew, and funding into and just after settlement windows, and watch for widening spreads or thinning order books—both signal higher slippage risk. Use institutional dashboards (e.g., major venues’ options OI and expiries) to verify where the market is most exposed.

Actionable Playbook

• Size down leverage 12–24 hours around expiry; volatility can spike and reverse quickly.
• Avoid tight stops near heavy OI strikes; expect whipsaws and stop hunts.
• Map OI clusters and likely “max pain” magnets before the window opens.
• Consider defined-risk hedges (e.g., short-dated put spreads or collars) over naked exposure.
• Wait for a post-expiry IV reset before selling premium; sell vol only if IV remains elevated after settlement.
• Use a confirmation trigger (volume + closing basis/funding shift) before chasing breakouts post-expiry.

Risk Scenarios to Price In

- Pin: Spot gravitates to a large strike, choppy range persists, IV bleeds. Good for patience and mean-reversion scalps. - Break: Spot blasts through a high OI strike, forcing hedge adjustments and extending the move. Manage slippage and avoid late entries. - Unwind drift: After expiry, direction becomes cleaner as dealer flows fade—often a better moment for trend trades.

One Practical Setup

If spot is hovering near a heavy strike into expiry and IV is elevated, a defined-risk hedge (small-size put spread 1–2 weeks out) can cushion a downside surprise while preserving upside. After expiry, if IV stays rich but price action stabilizes, selectively consider premium-selling structures with clear invalidation—only after confirming post-expiry direction and liquidity.

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