Ether options positioning for the end-of-May expiration shows that investors lack confidence in the chances of imminent approval of a cash exchange-traded fund and are anticipating significant price swings, a said an analyst.
May 23 marks the 240-day window the U.S. Securities and Exchange Commission has to decide on a VanEck ether spot ETF proposal. Subsequently, a decision on the ARK/21Shares filing is expected by May 24 and a decision on the Hashdex proposal is expected by May 30.
In January, Bloomberg Intelligence analyst James Seyffart pegged the chance of approval in May at 60%, then lowered his expectations to 35%, only to decide that the applications would ultimately be rejected.
According to Ruslan Lienkha Lienkha, head of markets at YouHodler, this growing doubt is manifesting itself in derivatives markets.
“Ether options expiring at the end of May show us a significant increase in volatility in the $3,600 strike price area, so the possible surpassing of this price level by the spot market would be accompanied At the same time, the implied price volatility curve could be adjusted by new facts or rhetoric from the SEC over the next month,” Lienkha told The Block.
Options expiring in May are not valued relative to those in April
-0.34%
However, Grant now observes that, following the strong rally and partial reversal of the ether spot price earlier this week, this situation has now reversed – and that May is not overvalued compared to in April. “There does not appear to be an excessively rich valuation of the month of May in terms of the so-called calendar butterfly compared to adjacent months,” Grant added.
For the April expirations, Grant said market participants appeared to have taken shorter positions, expecting this month’s implied volatility levels to remain stable or decline and the actual movements of the ether are limited, as derivatives traders adjust the expected movement in implied volatility for this month relative to subsequent months – and, in particular, May.
Ether rose 0.36% over the past 24 hours and was changing hands for $3,532 as of 7:59 a.m. ET, according to The Block’s price page.
The GM 30 Index, representing a selection of the top 30 cryptocurrencies, rose 0.19% to 148.05 over the past 24 hours.
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