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27 September 2020

A DeFi bull run might take $400 Ethereum options traders by surprise

A DeFi bull run might take $400 Ethereum options traders by surprise


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A DeFi bull run might take $400 Ethereum options traders by surprise.

By analyzing options model pricing, investors can easily conclude that traders are pricing in the 34% odds of Ether reaching $400 or higher.

That was equivalent to 8% of the $244 Ether futures price back then.

27 with a $400 strike goes for $53, equivalent to 14% of the $372 Ether futures price1

This change discourages traders from building bullish positions using options, and may create the wrong impression that the market became bearish. .

Traders should look at the 25% delta skew to assess how today’s traders are pricing in the recent 33% drop from $485 top after Sept.

This figure corroborates with Ether options' 25% skew data, signaling that recent excessive optimism has been scaled back.

This figure corroborates with Ether options 25% skew data, signaling that recent excessive optimism has been scaled back.

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