Gate Research Institute: ETH Implied Volatility Drops to Near One-Year Low, Increasing Cost-Effectiveness of Long Volatility Strategies

Summary
This Friday, approximately $2.1 billion worth of BTC and ETH options will undergo concentrated expiration. Currently, the implied volatility (IV) for BTC and ETH is relatively low, indicating that funds are predominantly buying put options. Gate has launched a portfolio strategy order tool to help users efficiently respond to different market conditions.

PANews, January 21 — According to observations by the Gate Research Institute, about $2.1 billion worth of BTC and ETH options will expire this Friday. The current implied volatilities (IV) for BTC and ETH are 42% and 56%, respectively. Notably, ETH IV has fallen to a very low level of 1.1% percentile over the past year. Over the past week, the 25-Delta Skew for BTC and ETH has been significantly negative, especially in short-term (7D/30D) options, indicating that funds are mainly buying puts and that short-term downside hedging demand has surged.

In terms of block trades, in the past 24 hours, the BTC and ETH options markets have seen block trades primarily involving puts spreads; for example, a BTC put spread buy 88k / sell 90k (30JAN26-P)), with approximately 1,115 BTC traded and a net premium income of about $730,000. For ETH, a long volatility wide straddle strategy bought 2800-P & 3200-C, with about 5,000 ETH traded and a net premium expenditure of $2.03 million.

Recently, Gate introduced a convenient options trading tool — portfolio strategy orders — to help users efficiently respond to different market scenarios such as narrow-range oscillations, slow gains, or slow declines. This feature supports various common multi-leg options strategies like spreads and straddles, allowing users to create multi-leg options in one go and visually display the overall cost, profit and loss structure, and risk exposure in a portfolio format. Users can quickly build and manage multi-leg strategies without having to operate each leg separately, significantly reducing operational complexity and improving trading efficiency.