ETH reached ATH yesterday of $1699 and has seen a healthy retrace back down to the $1556 level. Now ETH is forming an inverse Head and Shoulders pattern, and getting ready to explode higher over the weekend to reach $2K, before the incoming CME launch on 2/8.
Meanwhile, ETH is about to explode higher GME style, as a growing number of options traders are sitting on large unrealized losses following Ether’s (ETH) latest price surge.
Pankaj Balani, CEO of Delta Exchange told Cointelegraph that he has observed “a lot of naked call writing activity in ETH for deep out of the money call options all the way up to $2,000 and $3,000 strikes.”
A call option becomes deep out of the money if its strike price is significantly above the current price of an underlying asset — in this case, Ether.
Balani said: “As price surges, short call options positions are resulting in heavy unrealized losses, forcing option writers to buy more ETH in order to cover their short gamma exposure.”
Traders sold call options of strikes $2,000 and higher in December 2020 and January thinking Ether’s price would not appreciate as quickly and that their options would expire worthless.
“There is a chance that those sold options will not expire worthless,” he said.
As Ether moves higher, this scenario will only intensify, forcing additional buying activity.
In the options market, this feedback loop is referred to as a “gamma squeeze.”
ETH CREW: Let's converge and pull a GameStop-like gamma squeeze for ETH!!!
Cheers!
Source:
cointelegraph.com/ne...-delta-exchange-exec
Meanwhile, ETH is about to explode higher GME style, as a growing number of options traders are sitting on large unrealized losses following Ether’s (ETH) latest price surge.
Pankaj Balani, CEO of Delta Exchange told Cointelegraph that he has observed “a lot of naked call writing activity in ETH for deep out of the money call options all the way up to $2,000 and $3,000 strikes.”
A call option becomes deep out of the money if its strike price is significantly above the current price of an underlying asset — in this case, Ether.
Balani said: “As price surges, short call options positions are resulting in heavy unrealized losses, forcing option writers to buy more ETH in order to cover their short gamma exposure.”
Traders sold call options of strikes $2,000 and higher in December 2020 and January thinking Ether’s price would not appreciate as quickly and that their options would expire worthless.
“There is a chance that those sold options will not expire worthless,” he said.
As Ether moves higher, this scenario will only intensify, forcing additional buying activity.
In the options market, this feedback loop is referred to as a “gamma squeeze.”
ETH CREW: Let's converge and pull a GameStop-like gamma squeeze for ETH!!!
Cheers!
Source:
cointelegraph.com/ne...-delta-exchange-exec