Traders Selling BlackRock Bitcoin ETF Puts Likely Pursuing Cash-Secured Strategies
Recent spikes in put option volume tied to BlackRock’s spot bitcoin ETF (IBIT) have drawn attention but may not indicate outright bearish sentiment. Instead, the activity likely stems from traders employing cash-secured put selling strategies to generate passive income or acquire the ETF at a lower price.
On Friday, over 13,000 contracts of $30 out-of-the-money (OTM) puts expiring May 16 changed hands, while volume in $35 puts expiring January 16, 2026, exceeded 10,000 contracts. This occurred as IBIT rose 1.7% to $57.91, according to Amberdata.
Greg Magadini, Amberdata’s director of derivatives, noted the likely motivation: “The $35 Puts for Jan 2026 traded +10k contracts, with an IV range of 73.52% to 69.94%, and a VWAP at 70.75%, suggesting net selling flows—potentially from traders pursuing cash-secured put selling after missing the rally.”
In a cash-secured put strategy, sellers agree to purchase the underlying asset at a specific price (the strike price) if the option is exercised. In return, they receive a premium as compensation for taking on the obligation. Traders typically use this approach to collect premium income or secure a favorable entry point on the underlying asset, provided they maintain sufficient cash reserves to fulfill the purchase if required.
For instance, sellers of the $35 put option for January 2026 will profit by keeping the premium if IBIT stays above $35 until expiration. However, if IBIT drops below that price, the put sellers will be required to purchase the ETF at $35 while still retaining the premium earned. A similar payoff applies to the $30 put option expiring in May 2025.
This strategy mirrors one earlier suggested by Saxo Bank analysts for Nvidia, highlighting its viability in bullish yet volatile market conditions.
Calls Remain Expensive Relative to Puts
IBIT call options continue to trade at higher premiums than their put counterparts. Positive call-put skews—across expirations ranging from five to 126 days—reflect richer implied volatility on calls, signaling strong bullish sentiment. This trend aligns with bitcoin options pricing observed on Deribit, the leading crypto options exchange.
ETF Inflows Reflect Continued Demand
On Friday, IBIT saw a significant net inflow of $393 million, representing the bulk of the $428.9 million total inflow across the 11 U.S.-listed spot bitcoin ETFs, according to Farside Investors. This ongoing institutional demand further reinforces optimism surrounding bitcoin’s trajectory.
While the increased put option volumes might appear bearish at first glance, the underlying dynamics suggest a calculated approach by traders to capitalize on IBIT’s growth while hedging downside risks.
