Deep out-of-the-money (OTM) Bitcoin (BTC) puts are being fired up over the longer term as traders buy cheap lottery tickets for potential moonshot gains amid wild BTC moves.
On leading cryptocurrency options exchange Deribit, the $20,000 strike put is the second most popular option expiring in June 2026, with more than $191 million in notional open interest.
Notional open interest is the dollar value of the number of active contracts. A put option with a strike price lower than the current market price of BTC is called OTM. These OTC puts tend to be cheaper than puts near or above the BTC spot price.
There is also strong activity on other OTM puts at the June expiration, with strike prices of $30,000, $40,000, $60,000 and $75,000.
Activity in deep OTM put options is often interpreted as traders preparing for a price collapse. But that’s not necessarily the case here, as the exchange also saw activity in higher-strike calls above $200,000.
Sidrah Fariq, global head of retail at Deribit, said that overall, these flows represent a bullish view on low-cost long-term volatility rather than a bet on price direction. Think of it as a cheap lottery ticket to a potential volatility explosion over the next six months.
Fariq told CoinDesk, “There is approximately 2,117 open interest in the $20,000 Bitcoin puts expiring in June. We also saw some large trades in the $30,000 puts and $230,000 calls. The combination of these far out-of-the-money options does not represent a directional trade, but rather a deep wing trade used by professionals to cheaply trade long-term volatility and adjust for tail risk in the book.”
She explained that this is essentially volatility positioning rather than price positioning because the $20,000 put or $230,000 call is too far away from the spot price to be a purely protective hedge. As of this writing, BTC is changing hands for nearly $90,500, according to CoinDesk data.
Those who hold both OTM calls and puts may experience asymmetric returns from extreme volatility or sharp price movements in either direction. But if the market remains flat, these options will quickly lose value.
Options are derivative contracts that give the buyer the right to buy or sell an underlying asset at a predetermined price at a later date. Put options provide the right to sell and represent a bearish bet on the market. A call option provides the right to buy.
The crypto options market, including those associated with the BlackRock IBIT ETF, has evolved into a complex arena where institutions and whales engage in three-dimensional chess to manage risk and profit from swings in price direction, time decay, and volatility.
Overall, options market sentiment appears to be bearish as BTC puts across all tenors are trading higher than calls, according to Amberdata’s Options Risk Reversal. This is at least partly due to ongoing call option coverage, a strategy designed to increase yields on top of cash market holdings.
