Traders Turn to Bitcoin Options as SEC ETF Decision Approaches
On December 22, 2023, the open interest for bitcoin options reached an all-time high, surpassing $18 billion. This surge in open interest suggests that bitcoin traders are increasingly using options to manage risk and speculate on the future price movements of bitcoin, especially in anticipation of significant events like the U.S. Securities and Exchange Commission's (SEC) pending decision on a spot bitcoin exchange-traded fund (ETF).
Bitcoin options trading involves buying or selling contracts that give traders the choice, but not the obligation, to purchase or sell an underlying asset at a predetermined price within a specified timeframe.
Traders utilize options as a means to predict the price fluctuations of BTC or protect their existing holdings from potential volatility. With the SEC expected to announce its decision on a spot bitcoin ETF by January 10, 2023, reports indicate that bitcoin traders are taking precautions to safeguard their investments against the potential market turbulence that may follow the ruling.
A positive ruling could potentially drive up the price of bitcoin, while a negative one could trigger a downturn. Through options, traders aim to shield their portfolios from unfavorable price changes. As of December 22, 2023, the open interest in bitcoin options was approximately $18.33 billion.
As of December 23, 2023, the open interest in bitcoin options stands at $17.55 billion. The last quarter of the year, including October, November, and December, has witnessed the highest options volume in the history of bitcoin. Data shows that October saw a substantial volume of $36.27 billion, followed by $36.16 billion in November, and $34.47 billion in December (to date).
"The recent surge is being driven by leveraged and speculative traders," said Ryan Kim, the head of Falconx's derivatives department, in a conversation with Bloomberg's David Pan. "These traders may consider it wise to pay a premium to protect their leveraged long positions with bitcoin puts, betting on a significant price movement in either direction," added Kim.
What are your thoughts on the increasing interest in bitcoin options ahead of the SEC's decision on January 10? Feel free to share your opinions and insights on this matter in the comments section below.
Frequently Asked Questions
What are the fees for an IRA that holds gold?
An Individual Retirement Account (IRA) fee is $6 per month. This fee includes account maintenance fees as well as any investment costs related to your selected investments.
Diversifying your portfolio may require you to pay additional fees. The fees you pay will vary depending on the type of IRA that you choose. Some companies offer free checking accounts, but charge monthly fees to open IRA accounts.
Most providers also charge an annual management fee. These fees can range from 0% up to 1%. The average rate is.25% annually. These rates are usually waived if you use a broker such as TD Ameritrade.
What precious metals could you invest in to retire?
It is gold and silver that are the best precious metal investment. They are both simple to purchase and sell, and they have been around for a long time. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: The oldest form of currency known to man is gold. It's stable and safe. This makes it a good option to preserve wealth in uncertain times.
Silver: Investors have always loved silver. It is an excellent choice for investors who wish to avoid volatility. Silver is more volatile than gold. It tends to rise rather than fall.
Platinium: Platinum is another form of precious metal that's becoming increasingly popular. It's like silver or gold in that it is durable and resistant to corrosion. It's also more expensive than the other two.
Rhodium. Rhodium is used as a catalyst. It is also used for jewelry making. It is also very affordable in comparison to other types.
Palladium (or Palladium): Palladium can be compared to platinum, but is much more common. It's also less expensive. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
What's the advantage of a Gold IRA?
A gold IRA has many benefits. It is an investment vehicle that can diversify your portfolio. You have control over how much money goes into each account.
You can also rollover funds from other retirement accounts to a gold IRA. This allows you to easily transition if your retirement is early.
The best thing is that investing in gold IRAs doesn't require any special skills. These IRAs are available at all banks and brokerage houses. You don't have to worry about penalties or fees when withdrawing money.
But there are downsides. Gold has historically been volatile. It is important to understand why you are investing in gold. Are you seeking safety or growth? Are you trying to find safety or growth? Only after you have this information will you make an informed decision.
If you are planning to keep your Gold IRA indefinitely you will want to purchase more than one ounce. A single ounce will not be sufficient to meet all your requirements. You could need several ounces depending on what you plan to do with your gold.
You don't have to buy a lot of gold if your goal is to sell it. You can even live with just one ounce. However, you will not be able buy any other items with those funds.
Is it a good idea to open a Precious Metal IRA
The most important thing you should know before opening an IRA account is that precious metals are not covered by insurance. If you lose money in your investment, nothing can be done to recover it. This includes all investments that are lost to theft, fire, flood, or other causes.
You can protect yourself against such losses by purchasing physical gold and silver coins. These items are timeless and have a lifetime value. You would probably get more if you sold them today than you paid when they were first created.
When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality products. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.
Remember that you will not see any returns unless you are retired if you open an Account. Don't forget the future!
Statistics
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
irs.gov
cftc.gov
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- Do you want to keep your IRA gold at home? It's not exactly legal – WSJ
bbb.org
How To
Tips for Investing in Gold
One of the most sought-after investment strategies is investing in gold. Because investing in gold has many benefits. There are many ways you can invest in gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
Before you buy any type of gold, there are some things that you should think about.
- First, find out if your country allows gold ownership. If it is, you can move on. Or, you might consider buying gold overseas.
- You should also know the type of gold coin that you desire. You can choose between yellow gold and white gold as well as rose gold.
- Thirdly, it is important to take into account the gold price. It is best to start small and work your way up. Diversifying your portfolio is a key thing to remember when purchasing gold. Diversify your investments in stocks, bonds or real estate.
- Lastly, you should never forget that gold prices change frequently. Be aware of the current trends.
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By: Jamie Redman
Title: Bitcoin Options Open Interest Surpasses $18 Billion as Traders Await SEC ETF Verdict
Sourced From: news.bitcoin.com/bitcoin-options-open-interest-skyrockets-past-18-billion-as-traders-anticipate-sec-etf-decision/
Published Date: Sun, 24 Dec 2023 18:30:17 +0000
