In the last 24 hours, there has been more activity on the options market for ether (ETH), than Bitcoin (BTC), the first time in 2023.

In the last 24 hours, ether option contracts worth $1.23bn have been traded on major exchanges. This includes industry leader Deribit. According to Laevitas, a Swiss data tracking website, this is almost 60% of global crypto options trading and 50% higher than bitcoin’s $823.7million notional trading volume.

Options are derivative contracts which give the buyer the right, but not the duty to purchase the underlying asset for a certain price and on a particular date. Call options confer the right of purchase, while put options confer the right of sale. Call and put options are used by traders to protect their exposure to the spot/futures markets and acquire an asymmetrical payout.

The recent increase in activity on the ether option market follows the successful implementation by Ethereum of the Shanghai Upgrade, which was highly anticipated on Wednesday. The upgrade opened up withdrawals for over 18 million ether that had been staked on the network since December 2020. This de-risked staking, which is the process of locking coins into the blockchain in exchange for rewards.

Since then, CoinDesk’s ether index ( ETX ) has risen by more than 10%, reaching a high of $2.115 in eight months, defying concerns of a price slump after the upgrade and outperforming bitcoin. Investors are now more interested in ether options due to the double-digit gains.

In an analysis on Deribit, Chris Newhouse, a crypto market maker GSR’s OTC trader, said: “We have seen a strong demand for OTM calls [out-of the-money] in ETH.”

Out-of-the money calls are those that have strike prices higher than the current market rate for ether. These are cheaper than calls with strike prices below the current market price.

The positive skew of both the short-term (short-term) and long-term (long-term) options shows that there is a greater demand for ether. The skew is the difference between implied volatility premiums or the prices of calls and puts.

(Amberdata, Deribit) The call-put skews are now positive. This signals a renewed preference for call options. (Amberdata, Deribit) ((Amberdata, Deribit))

Shaurya malwa is the editor.