BlackRock’s Bitcoin ETF options made a historic debut, registering nearly $1.9 billion in notional value on its first day. Jeff Park, Head of Alpha Strategies at Bitwise Invest, shared his detailed observations on X and highlighted the key points from the first day of trading.
“Today marks historic day 1 of the launch of BTC ETF options. It didn’t disappoint, with over $1.86 billion in notional trading!” Park exclaimed. He gave an overview of the ten most interesting observations he had made during the day.
BlackRock’s Historical Bitcoin ETF Options Day 1
Park noted that the market quickly showed a “volatility smile” at 9:45 a.m., which persisted and broadened as the day progressed. “In fact, the smile got even wider throughout the day and ended up with higher wings due to EoD,” he noted.
When analyzing Volmex Finance’s BVIV Index, Park highlighted that the implied volatility (IV) movements did not predictably match Bitcoin’s price trajectory. “More interestingly, it did NOT match the BTC price uptrend (and then down) in a predictable way,” he noted.
The most traded contract was the C55 call option of 1/17/24, with over 40,000 contracts. Park pointed out that this contract had already exceeded the position limit of 25,000. “As I shared yesterday, the 25,000 limit is too small relative to the deep liquidity IBIT has shown in recent months,” he stated.
Park was particularly intrigued by the 12/20/24 C100 call option, which he described as “a real lottery ticket.” Trading at 105% implied volatility and with a delta of just 3%, this option saw heavy volume early in the trading day. “Implied volume rose to 105%. Even more interesting was how big the volume was in the first hour the market was open. It means that a serious investor was loading it at 10am, and the price was steadily rising as the volume increased. This was probably the biggest veggie opportunity of the day,” he explained.
The overall put/call ratio was around 0.23, indicating a strong preference for calls over puts. “What’s even more interesting, though, is when you segment it by expiration date,” Park noted. Longer-term contracts, such as the January 2026/2027 contracts, showed an even lower put/call ratio of 0.08. “That means there is roughly a 10x imbalance to the uptrend,” he pointed out, highlighting extremely bullish sentiment.
Contrary to some expectations, MicroStrategy‘s (MSTR) options trading remained robust despite the launch of IBIT options. “MSTR’s price has meaningfully decoupled from Bitcoin over the past hour, where it closed even higher than where we started the day,” Park noted. “MSTR is in its league,” he concluded, indicating that the company’s stock continues to attract its own distinct investor base.
Looking ahead, Park mentioned the upcoming launch of BITB options. “It will be a different option chain It will work and others that investors should consider before buying/selling and determining where the best value may lie,” he said. Park was confident that non-institutional trading would gravitate towards non-IBIT ETFs, potentially opening up more opportunities for professional retail investors.
Bloomberg ETF expert James Seyffart as long as additional insights, confirming the monumental trading volumes. “The final number of options on the first day of IBIT amounts to just under $1.9 billion in theoretical exposure traded via 354k contracts. 289k were calls and 65k were puts. That’s a ratio of 4.4:1,” Seyffart shared on X. He suggested that these options likely contributed to Bitcoin reaching new all-time highs during the day.
When crypto analyst James Van Straten asked questions about the imaginary target and position limits, Seyffart acknowledged the limitations. “The 25k position limit is likely a weight on volume and Open Interest for (the) near future,” he replied. On the rationale behind the limits, Seyffart explained: “Not standard – no. But the SEC and CFTC were certainly concerned about it manipulation of the market etc. Was part of the requirement to be approved!”
At the time of writing, BTC was trading at $93,404.
Featured image created with DALL.E, chart from TradingView.com