IBIT is an ETF that tracks the underlying Bitcoin price. What's super cool about that is you can trade options on the ETF, but you can also use IBIT's options chain to get a different kind of read on the underlying coin.
I don't see people word it this way often, but the general concept feels interesting. If I see puts volume exceeding calls volume by a lot, it makes me think short-term sentiment around Bitcoin is bearish (or at least more defensive). And if IBIT is sitting near a major support level, it might be a hint that Bitcoin itself is also near a major support level.
Is this generally the right way to think about it? And does anyone here prefer trading the ETFs (and their options) instead of trading crypto directly?
Reading Bitcoin sentiment from IBIT's options chain
byu/CameraGlass6957 inoptions
Posted by CameraGlass6957
2 Comments
look at research on using skew to predict future returns, btc might be weird if it functions more like a currency than a stock
e.g.: What Does the Individual Option Volatility
Smirk Tell Us About Future Equity Returns?
Yuhang Xing, Xiaoyan Zhang, and Rui Zhao
You should compare bitcoin vol to ibit vol and now you have yourself relative value trading.