Bitcoin's $16 billion options expiry Friday: only about $550 million of it is actually in the money

Bitcoin's quarterly options expiry lands on Friday, September 25, at 8:00 UTC, and it is a big one: roughly $15.9 billion of bitcoin options and $2.1 billion of ether options on Deribit, the largest crypto options exchange, according to Deribit chief executive Luuk Strijers, speaking to CoinDesk. That headline number is the face value of the contracts. It is not the amount of money that changes hands at settlement, and the gap between the two is the part worth understanding.

What we counted

We pulled every open bitcoin and ether option from Deribit's public data feed on Wednesday morning and added them up ourselves. Each Deribit bitcoin option covers one bitcoin.

Deribit open interest at about 9:50 AM ET on September 23, valued at Deribit's bitcoin index of $85,621 and an ether price of about $2,722. In-the-money value is what option holders would collect if the contracts settled at that price. Figures move with the market until Friday.

The number behind the $16 billion

If bitcoin settled Friday where it traded Wednesday morning, the calls that are in the money would be worth about $507 million and the puts about $42 million. That is roughly $550 million, or about 3.5% of the face value. Most of the book is either far out of the money and will expire worthless, or close enough to the current price that its cash value is small.

Our count broadly matches what Deribit told CoinDesk: we find about 52% of bitcoin call contracts with strikes below the current price, against the 55% of call notional Strijers cited, and only about 4% of puts in the money. The single most crowded strike is $70,000, with about 8,800 calls and 8,100 puts open, followed by heavy call positions at $85,000, $90,000 and $100,000.

Why "max pain" matters less than it sounds

Traders often point to the max pain level, the settlement price at which option buyers as a group collect the least. Deribit put it at $75,000; our calculation from Wednesday's book lands at $76,000. The theory is that the price gets pulled toward it.

The dollar amounts suggest caution with that idea. At $76,000, holders would collect about $300 million in total. At $85,000 they would collect about $520 million, and at $90,000 about $800 million. Moving bitcoin down by more than $9,000 to shave a quarter of a billion dollars off payouts is not an obvious trade for anyone, given that bitcoin's own market is many times that size. The level is a reference point, not a target.

What could actually change on Friday

The more concrete effect is on hedging. Strijers told CoinDesk that dealers who sold calls had to buy bitcoin as the price climbed through the $80,000 to $87,000 area to stay hedged, which likely added to the rally. Once those contracts expire, that buying need disappears, and he said short-term volatility can rise and the trading range can reset. Deribit's chief commercial officer, Jean-David Péquignot, told CoinDesk that put positions at $60,000, $70,000 and $75,000 form layers of defensive positioning below the market.

For a trader, the practical read is this: the expiry removes more than a third of Deribit's bitcoin options book in one go, so the hedging flows that have been shaping the price this month get rebuilt around the October and December contracts. On our count, the December 25 expiry is next biggest, with about 118,400 bitcoin contracts open, followed by October 30 with about 105,200. Where that open interest settles next week tells you more than the max pain line does.

For today's prices and the rest of the market, see our daily crypto report and the crypto prices board.

Sources: Deribit public market data; CoinDesk. Calculations by The Company Chronicle. Crypto assets and options are volatile. This is market information, not investment advice.