Emily Walker
BlackRock’s Bitcoin ETF options had a groundbreaking launch, racking up nearly $1.9 billion in notional value on the very first day of trading. Jeff Park, who leads Alpha Strategies at Bitwise Invest, shared his insights on X, pointing out significant highlights from this historic trading day.
“Today marks the beginning of BTC ETF options, and it was impressive, with over $1.86 billion in notional traded!” Park enthused. He elaborated on the top 10 observations he made throughout the day in a detailed thread.
Day 1 Insights on BlackRock’s Bitcoin ETF Options
By 9:45 AM, Park noted that the market had established a “volatility smile” that not only persisted but also widened as the day went on. “In fact, the smile got even wider throughout the day, finishing with higher wings by end of the day,” he noted.
Park analyzed the BVIV Index from Volmex Finance, highlighting that the movements in implied volatility (IV) did not align as expected with the price changes of Bitcoin. “Interestingly, it did NOT follow the predictable upward movement of BTC price (then down),” he remarked.
The most traded option was the 01/17/24 C55 call, surpassing 40,000 contracts, which exceeded the position limit of 25,000. Park criticized the position limit, stating, “As I mentioned yesterday, the 25k limit is too small compared to the deep liquidity IBIT has shown over recent months.”
Park found the 12/20/24 C100 call option fascinating, dubbing it “a true lottery ticket.” Trading at an implied volatility of 105% with a delta of just 3%, this option attracted considerable volume early on. “The implied volatility reached 105%. Notably, the volume during the first hour was substantial, indicating a serious investor was accumulating it at 10 AM, causing the price and volatility to increase. This likely represented the biggest vega opportunity of the day,” he explained.
The overall put/call ratio was about 0.23, signaling a strong preference for calls over puts. “However, what’s even more fascinating is when you break it down by Expiry Date,” Park mentioned. Longer expiring contracts like January 2026/2027 showed an even lower put/call ratio of 0.08, suggesting a roughly 10x tilt toward the upside, emphasizing a notably bullish outlook.
Interestingly, options trading for MicroStrategy (MSTR) remained robust following the launch of IBIT options. Park observed, “MSTR’s volatility diverged significantly from Bitcoin’s in the last hour, closing even higher than it started the day.” He noted that “MSTR is in its own league,” suggesting that the company’s stock continues to draw an independent investor group.
Looking forward, Park mentioned the forthcoming launch of BITB options. “It will present another option chain for investors to consider when deciding where the best value lies,” he remarked. He firmly believes that non-institutional trading may lean toward non-IBIT ETFs, potentially revealing more opportunities for retail investors.
Bloomberg ETF expert James Seyffart shared further insights, affirming the incredible trading volumes. “The final tally for IBIT’s first day of options is just shy of $1.9 billion in notional exposure traded through 354k contracts. We saw 289k Calls and 65k Puts, giving a ratio of 4.4:1,” Seyffart outlined on X. He suggested that these options may have played a role in pushing Bitcoin to new all-time highs that day.
In response to a query regarding position limits, Seyffart acknowledged these constraints and commented, “The 25k position limit is likely a hindrance to volume and Open Interest for the foreseeable future.” He elaborated on the reasons behind these limits, indicating, “Not standard—no. However, the SEC and CFTC were certainly concerned about market manipulation, and this was part of the requirements for approval!”
At the time of writing, Bitcoin was trading at $93,404.
