As Ethereum spot ETF listing approaches, ETH hedging activity increases and implied volatility rises
Odaily2024/07/16 08:09
By:Odaily
Odaily News With the upcoming launch of an Ethereum spot ETF, investors have flocked to the options market to hedge or protect existing market positions from price fluctuations. According to data from Deribit and Kaiko, implied volatility (IV) has risen across different time frames. This shows that there has been an increase in demand for options or derivatives that protect against price fluctuations. Hedging activity is more pronounced in short-term contracts, with implied volatility determined by options contracts expiring on July 19 relative to those expiring on July 26 at a recent high. According to Kaiko data, IV for July 19 expiring rose from 53% last Saturday to 62% on Monday, exceeding IV for July 26 expiring. The increase in IV for the July 19 contract shows that traders are willing to pay higher prices to hedge existing positions and protect against large price fluctuations in the short term. The surge in IV for recent contracts indicates a certain degree of uncertainty among traders, Kaiko analysts said in the Monday edition of the briefing. Traders also expect Ethereums volatility to increase relative to Bitcoin. According to Amberdata, the average spread between the 30-day Ethereum and Bitcoin implied volatility indices (BTC DVOL and ETH DVOL) on Deribit has been around 10% since late May, significantly higher than the 5% in the first quarter. (CoinDesk)
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