Options markets have a way of concentrating attention. On September 18, roughly $5 billion in notional value of IBIT options will expire, making it one of the most closely watched derivatives events in the short history of spot Bitcoin ETFs.
The majority of those contracts are calls, meaning most of the traders holding positions into expiration are betting on IBIT trading above their strike prices, not below them.
Max pain, explained
The number traders are circling on their calendars is $40. That is the max pain price for this expiration, the level at which the aggregate losses for all option holders would be greatest if IBIT settled there at expiry.
With IBIT currently trading in the mid-$30s to low-$40s range, the $40 max pain level sits right in the middle of realistic price outcomes.
