The S&P 500 has shown little movement recently, but the cryptocurrency market is gaining traction, highlighted by Bitcoin's rise to its highest level since mid-June. This uptick has sparked optimism among options traders, particularly in stocks associated with digital assets. Coinbase Global's shares surged approximately 11% to around $178 after previously dipping below $150 earlier this month.
The options market reflects this bullish sentiment, with over 114,000 call options traded compared to just under 50,000 puts, indicating strong demand for bullish positions. Notably, more than $100 million in options premium was traded in Coinbase by midday Tuesday, with $80 million linked to call contracts.
The most actively traded option was the 190-strike call expiring Friday, which requires a 7.5% increase in the stock price to be profitable. Similar bullish trends were observed in Robinhood Markets, where 125,000 of the 170,000 total contracts traded were calls.
This optimism is likely contingent on a recovery in cryptocurrency prices, as suggested by the options flows around the iShares Bitcoin Trust ETF (IBIT), which also showed a preference for calls. Additionally, traders are showing renewed interest in Strategy, a bitcoin treasury company that has seen significant declines over the past year, with a notable increase in call purchases.
Overall, these developments suggest that traders are positioning themselves for a potential recovery in the cryptocurrency market