Analyst: Investors still prepared to pay premium for short-term downside protection
CF Benchmark analysts say investors are still prepared to pay a premium for short-term downside protection, even though Bitcoin broke above the $66,000 mark after yesterday's inflationary weakness. Implied volatility remains higher for out-of-the-money puts compared to calls. Derivatives traders are willing to pay higher premiums for out-of-the-money (OTM) puts, which is an indicator of a bearish short-term market. The increase in implied volatility (IV) of OTM put options suggests that traders are essentially hedging against a potential decline in the value of bitcoin.
Analysts noted that the volatility curve between long-term puts and calls is "flatter," while calls are slightly skewed. "This suggests that investors are more optimistic about the long-term outlook for bitcoin, and if deflationary expectations begin to accelerate following a favorable Consumer Price Index report, it will be worth watching to see if call option bias increases."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Global economy risks fragmentation! Australia bets on AI as a new growth engine
In a potentially more fragmented and unpredictable global economy over the next 40 years, Australia relies on the deployment and development of artificial intelligence (AI) to drive economic growth.
Europe’s aviation fuel “red alert” in the fourth quarter: Shortfall will reach 510,000 barrels/day, South Korea’s exports surge to a four-year high to urgently fill the gap
According to analysts and shipping data, Europe will face a supply gap for aviation fuel in the fourth quarter, even as it turns to distant suppliers such as South Korea. South Korea's aviation fuel exports to Europe in September are set to reach a four-year high.
Apple (AAPL.US) nears a 5 trillion USD market capitalization, targeting Nvidia: the 1,999 USD foldable screen Duo becomes a critical battle.
Apple (AAPL.US) has unveiled its new iPhone, which could be the ticket for this consumer tech giant to reclaim its position as the most valuable company by market capitalization. The company is not far from reaching this goal.
Facebook and Instagram under Meta (META.US) experienced outages affecting thousands of users in the US last Sunday.
Thousands of users in the United States were unable to access Meta’s social platforms Facebook and Instagram last Sunday.