Today’s largest BTC block option transaction is another bull market spread. A boss spent US$1.2 million to buy 44,000 call options at the end of January + sell 50,000 call options, totaling 1,000 BTC.
Looking at the term structure of Deribit’s BTC options, the IV on January 12 was tipped to 80%. Everyone’s expectation in the options market was that the market would move dramatically 12 days ago. Traders expect the week ahead to be more exciting than the past, so buckle up. If the contract is leveraged, it is strongly recommended to buy some virtual index options as a hedge to avoid being liquidated.
Judging from the volatility of BTC, the bearish and bullish expirations at the end of January are relatively even, and the bearish ones in March are slightly higher than the bullish ones. This tendency is also relatively normal. Generally speaking, if the right side (compared to the left side) rises very high, it means that the demand for call options is extremely strong, and the general market (short term) is about to reach its top -> it is recommended to sell calls and buy puts; if on the other hand, the left side rises very exaggeratedly, then Generally, market (short-term) panic will soon end. In fact, I don’t recommend trading at this time. I think it’s too risky. Unless you do arbitrage.
Risk aversion has increased for three consecutive days. Expectations for an interest rate cut in Europe have been postponed due to a slight rebound in German inflation. Prices have risen at the fastest pace in three months. The possibility of an interest rate cut by the European Central Bank in March has fallen below 43%. Euribor in December Futures fell 14 points, their biggest drop in nearly six months.
In the United States, ADP employment growth exceeded expectations, and initial jobless claims remained stable, further increasing market expectations for stronger non-farm payrolls data today. The service industry, leisure and hotel industry growth in the ADP data was relatively strong, and another On the other hand, wage growth continues to slow down, with wage growth for job-changers falling from 8.3% to 8.0%, and wage growth for current employees also falling from 5.6% to 5.4%.
The U.S. Treasury yield curve overall moved up by about 7 basis points, with the 10-year yield returning to the 4% level. Re-adjustment of interest rate expectations is still the theme of the new year. In the past week, traders began to call back some excessive interest rate cut expectations. In addition, , the unusually strong supply of corporate bond issuance (exceeding US$50 billion this week) has also put further pressure on yields. French and Spanish government bond auctions have seen large tails, and Euribor futures prices have also seen sharp adjustments. In the United States, short-term SOFR futures (mid-2024-2025) bear steeply by 9.5 basis points, bringing better returns (higher interest rates) to short-term capital accounts.
Stock market performance remains weak, with energy and large technology stocks taking turns dragging the index lower. As investors anticipate a wave of central bank interest rate cuts, short interest in the SPY and QQQ ETFs is at its lowest level in years, and investors are unwilling to engage in any downside protection. Holding a long position in both stocks and bonds is disadvantageous in this move. If non-agricultural employment data and CPI strengthen, it may trigger further declines in risk assets, and more investors may engage in bargain hunting operations.
In addition, Apples stock price continued to fall, and investment bank analysts continued to cut expectations for iPhone sales. The stocks rating fell to a three-year low, making it the weakest among the seven major technology giants, dragging down the market value of the seven major technology stocks in just three days. Nearly $390 billion evaporated.
Considering the recent JOLTS and ADP data results, there is a chance that todays non-farm payrolls data will be slightly higher than the market forecast of 175,000. Variables will come from the retail industrys holiday hiring pace (which may be soft) and the return of cars and cars to the workplace after the strike. Number of people employed in the casino industry (employment population increased).
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