Options Signal Ether Strength for First Time in 6 Months

The impending network upgrade, dubbed the "Merge" or Ethereum 2.0, promises to make ether a deflationary currency and Ethereum an environmentally friendly smart contract blockchain.

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Some traders are buying large amounts of call options, one market observer said.

At this point, some traders are buying large amounts of call options (usually expiring within a week) and buying the underlying [asset] in the spot market,” Griffin Ardern, volatility trader from crypto asset management firm Blofin, said.

“To hedge their risk, options market makers [who sold calls to investors] need to buy spot or go long futures, which will push prices up further quickly when liquidity is insufficient,” Ardern added.

Options market makers are entities entrusted with ensuring healthy liquidity levels on exchanges. Market makers are usually on the opposite side of investors’ trades and run a direction-neutral exposure by constantly buying and selling the underlying asset in spot/derivatives markets.

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