Investors put over $2 million into the $1.10 call option on XRP listed on Deribit. This was the highest among all existing futures. The large open interest in the nascent XRP Coin options market likely reflects ETF optimism.
A $1.10 play on XRP Coin options!
Deribit’s nascent options market for XRP Coin is seeing a surge of activity, particularly in the $1.10 call option, which represents a bet that prices for the payment-focused cryptocurrency will double by the end of the month. According to data tracked by Amberdata, XRP’s $1.10 call option will expire on August 28. The option has an open interest of 4,347,000 contracts worth $2.44 million. This makes it the most preferred option of all the XRP Coin options available on the exchange. This is a significant amount for an options market that is only five months old.
This figure, the number of active bets, has increased by 838,000 contracts in just five months. According to Griffin Ardern, head of options trading and research at crypto finance platform BloFin, the increased activity on the $1.10 call likely reflects a net long position. In this context, Ardern makes the following assessment:
From the gamma distribution, it looks like a net long position that expired on August 30. If the $0.75 resistance level of the last two weeks can be broken, the XRP Coin price is likely to rise above $1.10. Perhaps institutions will apply for an XRP ETF in the US, which could be an important factor causing a sharp rise in prices.
Martin Cheung doubts $1.10!
Still, Martin Cheung, options trader at Pulsar Trading Capital, expressed skepticism about whether prices could rise above $1.10 by August 28. Cheung commented on the growing demand for $1.10 XRP call options as follows:
XRP has risen a lot this year. I also think people are betting that the next ETFs to be approved will be on XRP and SOL. However, the end of August is very close; a potential XRP ETF announcement could boost prices by, say, 20%, but $1.10 seems far away.
Are ETFs on the way for XRO Coin?
As you’ve been following on Kriptokoin.com, XRP Coin surged over 30% to $0.62 last month. However, it has since fallen back to just above $0.57. A call option gives the buyer the right, but not the obligation, to purchase the underlying asset, XRP, at a predetermined price on or before the expiration date. A buyer of a call option is essentially bullish on the market. He also bets on a rally above the level at which he bought the call option. Gamma refers to the rate of change in the delta of an option. It also reflects how sensitive the price of the option is to changes in the price of the underlying asset.
Last Wednesday, US District Court Judge Analisa Torres ruled on the US SEC’s lawsuit against Ripple Labs over unregistered sales of XRP coins in 2020. The court imposed a $125 million penalty for institutional XRP sales. It also issued an injunction against further violations. However, it rejected the SEC’s request for a $2 billion fine. Ripple hailed the decision as a victory. This sparked hopes of a potential XRP ETF launch in the US. Meanwhile, the regulator approved Bitcoin and Ethereum ETFs earlier this year. Thus, opening the door to billions of dollars in mainstream cryptocurrencies.
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