Bitcoin braces for $6.4B options expiry as gamma risk builds

Bitcoin traders face $6.44 billion in options expiring on Deribit at 08:00 UTC Friday, Aug. 28, after BTC rallied 22.9 percent in seven days to near $79,000.

Deribit Chief Risk Officer Shaun Fernando said more than $500 million in notional value was located within 5 percent of Bitcoin's market price, which "should result in increased gamma hedging in the build-up to expiry."

The expiry covers 81,700 contracts — 44,639 calls and 37,061 puts — with a put-to-call ratio of 0.83. The $75,000 strike carries the largest call concentration at approximately $236 million in notional value, followed by $157 million at $80,000. Nearly 20 percent of Deribit's Bitcoin options open interest is scheduled to expire, Fernando said.

The concentration near $75,000 and $80,000 makes those levels critical for dealers managing gamma exposure. Fernando said the positioning "may result in unusual pinning around key strikes or accelerate moves through them," with volatility potentially falling after settlement once near-term hedging demand disappears.

Gamma hedging could accelerate moves through key strikes

Market makers commonly hedge options exposure by buying or selling Bitcoin, futures or other linked instruments. Their required hedge changes as Bitcoin approaches a heavily populated strike and the options' sensitivity to price movements rises. Depending on dealers' net positioning, hedging can either restrain Bitcoin near a strike or add momentum when the price moves decisively through it.

Bitcoin traded near $78,970 at the time of reporting, down approximately 1.4 percent over 24 hours but still 22.9 percent higher across seven days. Its daily range extended from about $77,955 to $80,194, according to CoinGecko data.

Fernando also reported a 30 percent relative increase in the Deribit Bitcoin Volatility Index, or DVOL, during the preceding week. The volatility term structure moved from backwardation to contango, meaning longer-dated contracts now carry higher implied volatility than shorter maturities. Call-put skew also moved from negative to positive, showing that traders assigned relatively higher implied volatility to calls than comparable puts after Bitcoin's fast recovery.

The rally was driven in part by accelerating ETF inflows. U.S. spot funds attracted about $1.1 billion across Aug. 19 and Aug. 20 as BTC broke from its earlier trading range. The rally later stalled above $81,200, with Bitcoin retreating toward $79,250 as momentum indicators flashed overbought signals. Liquidation clusters developed near $78,000 and between $81,000 and $82,000.

The expiry's max-pain level stands near $68,000, the settlement price at which the largest amount of options value would expire worthless. Bitcoin is trading approximately $11,000 above that level, and reaching it before settlement would require a much larger move than simply returning to the main $75,000 and $80,000 strike clusters.

Frank Hepworth, founder and CEO of New Market Trading, told TheStreet Roundtable that expiry weeks "always sound scarier than they are," noting that 62 percent of the expiring contracts are worthless and September's expiry is nearly twice the size.

CryptoQuant's Bull Score jumped from 30 to 80 within a week, with eight of 10 indicators bullish — the most optimistic reading since October 2025. The report cautions that Bitcoin must hold above its 365-day moving average of about $83,000 for formal confirmation of a new bull phase.

The confirmed deadline is Friday at 08:00 UTC. Traders will watch whether Bitcoin remains near $80,000, retreats toward $75,000 or breaks beyond the concentrated strikes as expiring positions and dealer hedges are closed or rolled forward. Volatility can also fall after settlement once near-term hedging demand disappears.

This article is for informational purposes only and does not constitute investment advice.