An institutional investor executed a butterfly spread options strategy on the Deribit exchange, betting on a Bitcoin price of $95,000 by October 30. The trader paid a premium of $3.2 million for this position, which limits potential losses to the initial investment.
The strategy involves three strike prices to maximize returns if Bitcoin reaches the target price. The current spot price of Bitcoin fluctuates between $85,000 and $86,000, meaning the target represents an expected increase of approximately 11% to 12%.
Market activity for the October 30 expiry shows significant bullish positioning. Specifically, more than 22,000 contracts were traded for the $95,000 call option, contributing to a notional volume of roughly $1.9 billion over a recent 24-hour period.
Open interest for strike prices between $85,000 and $100,000 has increased throughout September and October. Analysts suggest that if Bitcoin approaches the target, dealer hedging activity could potentially accelerate price movements through a gamma squeeze.
