“Move,” options contract that is known to track Bitcoin’s (BTC) daily volatility recently reported a 25% monthly trading volume increase on Delta Exchange, the crypto derivatives platform.
It was reported on April 16 that Move contracts worth $8 million were traded on the platform over the past 30 days. In addition, the platform witnessed an increase of $1 million worth of Ether (ETH) volatility tracking contracts traded during the same time period.
Pankaj Balani, CEO of Delta Exchange, said: “Whilst the first 2 weeks of March saw just over 1Mn worth of BTC MOVE contracts traded, this number was close to 2.5 Mn for the last 2 weeks. Since then, though the volatility has cooled off, volumes in the MOVE contracts are still high and over 4Mn worth of MOVE contracts have already been traded for the month of April. We are seeing the similar trends on ETH MOVE product too.”
According to Delta Exchange, this represents a 25% increase in trading volume for the contracts. Balani explained that why he believes traders are displaying increased interest in the options. “Traders are taking advantage of the high volatility environment and selling options. We saw strong selling in these products post Black Thursday as volatility spiked to as high as 250%. […] We are in a high volatility environment,” Pankaj added.
Pankaj Bilani went forth to pointing out that Bitcoin’s volatility was about 40%-50% before the recent crash. When the crash ended, the volatility increased fivefold. In the same light, he concluded that now that the volatility decreased again, the contracts have once again become buyer dominated.
Balani also made mention of the fact that there are always two move contracts for Bitcoin and two for Ether. Here, one tracks the current and next day’s volatility, and the second starts trading when the current contract expires. It is important to understand that traders are allowed to set limit orders for the next day’s contract before matching starts. In regard to this Balani said, “Having contracts listed ahead of time gives traders an opportunity to roll their positions from the current day to the next day right when the contract is launched.” “Trading a MOVE contract is like trading a futures contract on the absolute movement in price of BTC or ETH. Traders are rather familiar with how futures trading works and hence find trading MOVE contracts much simpler than trading individual options,” he added.