Deep out-of-the-money (OTM) bitcoin (BTC) put options are lighting up at longer expirations, as traders pick up cheap lottery tickets for potential moonshot payoffs if BTC swings wild.
On leading crypto options exchange Deribit, the $20,000 strike put is the second most popular of the June 2026 expiration options, boasting a notional open interest of more than $191 million.
Notional open interest is the dollar value of the number of active contracts. Put options at strikes below the current market rate of BTC are said to be OTM. These OTM placements tend to be cheaper than those near or above the spot price of BTC.
The June deadline also sees significant activity in other OTM puts at $30,000, $40,000, $60,000, and $75,000 strikes.
Activity in deep OTM puts is typically read as traders bracing for a price crash. But that is not necessarily the case here, as the exchange also saw activity on higher strike calls above $200,000.
Taken together, these flows represent a bullish view on low-cost long-term volatility rather than a bet on price direction, according to Deribit’s Global Head of Retail Sidrah Fariq. Think of it as cheap lottery tickets on a potential explosion of volatility over the next six months.
“There are about 2,117 open interests on the $20K bitcoin placed for the June expiration. We also saw some large trades in the $30,000 put and $230,000 call strikes. The combination of these out-of-the-money options does not suggest directional trading, but rather deep wing trades that professionals use to trade long-term risk and adjust their cheapness.
She explained that it is essentially volatility positioning, not price positioning, because the $20,000 put or the $230,000 call are simply too far from the spot price to be a purely protective hedge. As of writing, BTC has changed hands near $90,500, according to CoinDesk data.
Holders of both OTM calls and puts can get asymmetric payouts from extreme volatility or wild price swings in either direction. But if markets remain flat, these options quickly lose value.
Options are derivative contracts that give the buyer the right to buy or sell the underlying asset at a predetermined price at a later date. A put option provides the right to sell and represents a bearish bet on the market. A call offers the right to buy.
The crypto options market, including that linked to BlackRock’s IBIT ETF, has evolved into a sophisticated arena where institutions and whales engage in three-dimensional chess, managing risk and profiting from price direction, time decay, and volatility changes.
Overall, the options market mood appears bearish, as BTC continues to trade at a premium to calls across all tenors, according to Amberdata’s options risk reversal. This is at least partially due to persistent call overwriting, a strategy aimed at increasing the yield on investments in the spot market.