Approximately $30.3 billion in Bitcoin options are set to expire on Friday, December 27, at 8:00 AM UTC—the largest quarterly options expiry of 2025. The massive event comes during holiday-thinned trading, creating conditions ripe for volatility as traders adjust positions and market makers hedge exposures.
The Numbers
Friday's Bitcoin options expiry by the numbers:
- Total notional value: $30.3 billion
- Approximate contracts: 346,000+ BTC worth of options
- Expiry time: 8:00 AM UTC on December 27
- Current Bitcoin price: Approximately $87,400
The Setup: Calls Struck Too High
Most call options (bets on higher prices) are struck far above current spot prices:
- Large clusters of calls at $100,000 strike price
- Significant open interest at $150,000 strikes
- Some calls struck as high as $200,000
With Bitcoin trading near $87,000, these out-of-the-money calls face near-certain expiry losses. Traders who bought these upside bets earlier in 2025—when Bitcoin was surging toward its all-time high near $126,000—are now underwater.
Why It Matters
Large options expiries can move markets for several reasons:
Gamma hedging: Market makers who sold options must buy or sell the underlying asset to remain hedged. As expiry approaches, these hedging flows intensify.
Max pain: The "maximum pain" theory suggests prices gravitate toward levels where the most options expire worthless, causing maximum losses for buyers.
Position rolling: Traders with expiring positions may roll into new contracts, creating additional volume and potential price impact.
Holiday Liquidity Risk
The timing amplifies the potential for volatility. With many institutional traders on holiday:
- Order book depth is reduced
- Smaller trades can move prices more than usual
- Flash crashes (like Tuesday's Binance incident) become more likely
- Automated trading systems may behave unexpectedly
What to Watch
Key levels and factors to monitor heading into Friday's expiry:
- $85,000: Significant put open interest; could act as support
- $90,000: Psychological resistance and call concentration
- ETF flows: Whether outflows continue or stabilize
- Funding rates: Perpetual futures funding as a sentiment gauge
Historical Context
Previous large options expiries have produced mixed results:
- Sometimes prices consolidate around "max pain" levels
- Other times, expiry serves as a catalyst for directional moves
- The post-expiry period often sees reduced volatility as positions clear
Ethereum Expiry Too
Bitcoin isn't alone. Significant Ethereum options also expire on Friday:
- ETH options worth billions expiring alongside BTC
- Similar dynamics of calls struck above current spot
- Correlated price action likely between BTC and ETH
Trading Considerations
For active traders:
- Consider reducing position sizes during the expiry window
- Set wider stop-losses to avoid being stopped out by volatility
- Be aware of potential flash moves in either direction
- The period after expiry may offer cleaner trading conditions
For longer-term holders:
- Short-term volatility rarely affects the long-term thesis
- Options expiries are temporary events, not fundamental shifts
- Consider using volatility to add to positions at better prices
Post-Expiry Outlook
Once Friday's expiry passes:
- Open interest resets, potentially reducing near-term volatility
- New year positioning begins as traders look to 2026
- January historically shows positive crypto returns
- Institutional traders return after the holiday
The Bottom Line
Friday's $30 billion Bitcoin options expiry is the largest of 2025 and arrives during holiday-thin trading. With most calls struck far above current prices and reduced liquidity, volatility is likely. Traders should prepare for outsized moves and consider position sizing accordingly. For longer-term investors, the expiry represents noise rather than signal—a temporary event that won't change Bitcoin's fundamental trajectory. Stay alert, manage risk, and don't let short-term volatility shake long-term convictions.
