What Time Do Bitcoin Options Expire?
February 14, 2022

Bitcoin (BTC) is one of the largest cryptocurrency tokens in its market capitalization as well as overall value, and as such, it has been the main point of appeal in the eyes of a lot of cryptocurrency investors.

This increase in popularity of investment options within the token has created numerous ways through which investors can dip their toes into the world of cryptocurrencies, one such investment option being Bitcoin options.

Bitcoin options represent an exciting way through which investors can take a position on the cryptocurrencies, but they do have an expiry date, so if you have ever been curious about what time do bitcoin options expire, we’ll dive in and tell you everything that you need to know.

Bitcoin Options Explained

Bitcoin options are a form of a financial derivative that gives investors the right, but not a full-on obligation to buy or even sell Bitcoin at a specific price, often referred to as the strike price, or at a certain date of expiry. Investors can pay a premium in order to buy an option.

The main difference here, when compared to outright buying Bitcoin (BTC) tokens on an exchange directly, is due to the fact that Options give investors the opportunity to take a speculative position on the future direction of the market price of BTC, be it upward or downward.

As such, Bitcoin options have always had a solid point of appeal for a lot of crypto investors on exchanges. What all of this means is that Bitcoin options essentially enable investors to trade on cryptocurrency volatility without ever having to take direct ownership of the underlying asset.

The main reason as to why this product is in such demand is due to the fact that Bitcoin increased by 1900% throughout 2017 and then decreased by 82% in 2018, giving both a lot of excitement and incentive for investors to pick this route when engaging with Bitcoin investments.

The Pros as Well as the Cons Associated With Investing in Bitcoin Options

Let’s dive into some of the pros and cons associated with Bitcoin options and what you can expect out of going through this investment route.

  1. Pros of Bitcoin Options

When a cryptocurrency investor decides to invest in a Bitcoin option, the profit potential Is essentially unlimited, while the risk is capped at the price of the premium.

These profits are all dependent on how far above or below the investor’s strike price is on the underlying assets at expiry.

However, there is another benefit, and this is that Bitcoin options are derivative products, which means that an investor is not taking direct ownership over the digital asset in question, which in this case is Bitcoin (BTC), but is simply speculating on its future market price.

This means that the investor here does not have to worry about holding the BTC cryptocurrency tokens within a secure digital wallet or creating an account at a cryptocurrency exchange, which enhances the overall accessibility and convenience associated with this type of cryptocurrency investment.

Additionally, derivatives even enable users to go short on Bitcoin, which would occur if an investor thinks the price will fall in the future, which in turn creates a new avenue for profits for traders that enjoy short-term speculations around various assets.

  1. Cons of Bitcoin Options

However, there are also cons that you need to be aware of. Specifically, due to the volatility of Bitcoin, added to the volatility of the options itself, there is a high level of risk. This is due to the fact that not only can the price movements take a profitable option to an unprofitable one within seconds, but it can make opening a position really expensive, which can be discouraging for newcomers.

That said, as the volatility of the underlying asset increases, so does the price of the option.

Given the fact that bitcoin is one of the most volatile markets that currently exist, you can safely assume that Bitcoin options will remain to be one of the most expensive types of options investments until there is a shift within the underlying market.

Note that, while buying bitcoin options, as previously mentioned, has a limited level of risk, when you sell the Bitcoin option, your loss could be unlimited, as you’d receive the premium from the buyer taking on this risk. Remember to review all of these factors at the Bitcoin OTC desk you decide to use.

What time do Bitcoin options expire?

With all of that in mind, we can now discuss what time Bitcoin options actually expire. In typical case scenarios, Bitcoin options are set to expire on a monthly date in blocks of six consecutive months, with two extra expiries set for the month of December. If within those six months, December is included, in that case, there will only be one extra December contract.

When a Bitcoin options contract ends up expiring, it can have a huge impact on the spot price of Bitcoin due to the fact that investors are effectively closing their positions to take on new ones.

Bitcoin Options Are a Risky but Exciting Investment

Hopefully, now you know a bit more about Bitcoin options and when exactly they expire. We answer all sorts of questions about Bitcoin, such as “can you buy part of a Bitcoin?” and “how long does it take for Bitcoin to transfer?” That’s our role as experts.

But remember that these are investments that typically carry a high level of risk associated with them, mainly due to the fact that the underlying asset, which in this case is Bitcoin (BTC), can increase or decrease in value at a second’s notice with tremendous amounts. Remember to always do a lot of research prior to making any investment and to never invest more than you are willing to or can afford to lose.

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