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Deribit has started listing ether (ETH) options with strikes above $1,000, and some traders are now betting the cryptocurrency will reach that price by year’s end.

Over 3,470 contracts – worth $1.3 million – of 1,120 call options have been traded for December 2020 and March 2021 expiry this month. These trades were executed on the Panama-based Deribit exchange, the world’s largest crypto exchange by options trading volume. It is the first exchange to offer options for strikes above $1,000, which went live on Aug. 1.

”Volumes have been decent and open interest [open positions] is over 2,500 contracts already, indicating some traders believe ETH can potentially show a price move of over 180% in five to seven months,” Luuk Strijers, CCO at Deribit, told CoinDesk.

Ether is trading near $390 at press time, representing a 200% gain on a year-to-date basis. The impressive price rally and expectations for continued DeFi-led bull run could be driving the activity in the options.

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An option gives owners the right, but not the obligation, to trade an underlying asset at a set price and date. Calls give its owners the right to buy the asset while puts give their owners the right to sell.

Open interest in ether’s options market has exploded this year, increasing 2,585% from $14 million to $376 million, according to data provided by Skew.

Options market data is widely used to identify support and resistance levels and potential trends in prices. For instance, Kyle Davies, co-founder of Three Arrows Capital, that $14,000 is a key hurdle for , which, if breached, could pave the way for $20,000. That’s because there is notable open interest buildup in options at $14,000 strike and negligible activity in higher strikes.

In ether’s case, however, open interest in strikes above $1,000 is too small to draw any conclusions about the investor bias. At press time, there are 2,541 contracts open at the strike price of $1,120. That’s a meager 0.3% of the total open interest of 878,104 contracts spread across multiple expiries, according to data provided by Deribit.

“I wouldn’t make much of the existing open interest of 2,500 contracts on these strikes. Almost every strike from $40 to $880 has that as minimum interest,” said Vishal Shah, an options trader and founder of Polychain Capital-backed derivatives exchange Alpha5.

This relatively low number of transactions reflects the fact that the options market as a whole sees a low probability that ether will trade at $1,000 or greater by the end of December. The probabilities are calculated with the help of the Black-Scholes formula, which is based on metrics such as call option prices, strike prices, the price of the underlying asset, time left for expiry and the risk-free interest rate.

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Traders use an option’s delta, which measures the sensitivity of the option’s price to changes in the underlying asset’s price, as an estimated probability for a given option to expire in-the-money or make profit on expiry. Call options at $1,120 strikes will expire in the money if the spot prices settle above $1,120 on the day of the expiry. Owners at that strike only see a profit if ether trades above that price plus the cost of the option.

At press time, the delta of the $1,120 call option expiring in December is 0.11. In other words, the probability of ether rising above $1,120 on or before Dec. 25 is 11%. Similarly, delta of the $1,120 March expiry call option is 0.18. Meanwhile, data provider Skew calculates a mere 5% probability of ether trading above $1,000 before New Year’s Day.

Also, the $1,120 call expiring in December has the same probability as the put option at $300 strike. It means the odds of bitcoin ending the year 22% below today’s price is similar to prices ending 187% higher from the current price.

“That tells you something about expectations,” said Shah, adding, “the ETH options market is not big enough to drive the price of the underlying.” Indeed, global options volume of $22.9 million is just 2% of the spot market’s volume of $11.7 billion.

Lastly, traders rarely take outright directional bets or naked long positions in deep out-of-the money options like the $1,120 call. “It’s more likely to be a hedge or part of a more elaborate strategy such as volatility or relative value plays,” Denis Vinokourov, head of research at London-based BeQuant, a cryptocurrency exchange & institutional brokerage. told CoinDesk in a Telegram chat.

Nevertheless, open interest buildup, delta and other option market metrics are good indicators of sentiment and become more reliable with the growth in the size of the market.