Bitcoin Traders Target $20K Bitcoin Strike as Deep Out of the Money Options Gain Traction
Deeply out-of-the-money (OTM) bitcoin (BTC) put options are shining at longer-term expirations as traders buy cheap lottery tickets for potential month-end returns if BTC goes wild.
On leading crypto options exchange Deribit, the $20,000 strike put is the second most popular among options expiring June 2026, with notional open interest of over $191 million.
Notional open interest is the dollar value of the number of active contracts. Put options below the ongoing market rate of BTC are said to be OTM. These OTM puts tend to be cheaper than those near or above BTC’s spot price.
The June expiration also sees significant activity in other OTM sales at the $30,000, $40,000, $60,000 and $75,000 strikes.
Activity in deep OTM selling is often read as traders preparing for a price collapse. But that’s not quite the case here, as the stock market has also seen activity in high-strike calls above $200,000.
Taken together, these flows represent a bullish view on long-term volatility at a low cost, rather than a bet on the direction of the price, according to Sidrah Fariq, Deribit’s Global Head of Retail. Think of it as cheap lottery tickets for a potential explosion of volatility over the next six months.
“There are approximately 2,117 open positions in the $20,000 Bitcoin selloff for the end of June. We have also seen some large trades in the $30,000 put and $230,000 buy attacks,” Fariq told CoinDesk.
He explained that this was essentially volatility positioning, not price positioning, because the $20,000 put or $230,000 call was too far from the spot price to be a purely protective hedge. As of writing, BTC has changed hands around $90,500. According to CoinDesk data.
Those who hold both OTM calls and puts can realize asymmetric gains from extreme volatility or extreme price swings in either direction. However, if markets remain stable, these options will quickly lose value.
Options are derivative contracts that give the buyer the right to buy or sell the underlying asset at a predetermined price at a later date. A put option provides the right to sell and represents a downward trend in the market. Offers the right to buy a call.
The crypto options market, including those tied to BlackRock’s IBIT ETF, has evolved into a complex arena where institutions and whales engage in three-dimensional chess, managing risk and profiting from swings in price direction, time loss and volatility.
Generally speaking, options market sentiment is bearish as BTC continues to trade at a premium to calls across all maturities, according to Amberdata’s reversal of options exposures. This is at least partly due to persistent call-on-writing, a strategy aimed at increasing returns alongside spot market holdings.
