Short-tenor BTC Options Skew Towards Calls

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Market Snapshot: Overnight Moves:

Daily Updates:

• Bitcoin broke past $120,000 yesterday evening for the first time since August, bringing its 7-day performance up to 9%. That rally has encouraged a broader move higher across crypto assets, with the total market cap of crypto tokens now at $4.3T. 
• ETH has outperformed BTC over the past week, up 12% — it rallied past $4,500 in early Asian trading hours. The rally in spot prices has been supported by a strong run of positive inflows into both asset’s Spot ETF products. Throughout the week, Bitcoin ETFs have only registered inflows, purchasing $2.2B worth of the asset, while Ethereum ETFs have snatched up just over $1B worth of Ether.
• Among the top 10 tokens by market capitalisation, Binance’s BNB coin has outperformed — it is up 6.4% overnight and touched a new all time high of $1,111. 

• The moves in spot price have ushered a diverging response in options markets however. For most of September, BTC options markets had shown a persistent skew towards put options — that has changed almost exactly in line with the beginning of October, with 7- and 14-day vol smiles now assigning a premium to OTM call options over OTM puts. However, while Q4 has historically been the strongest quarter for BTC and the crypto market as a whole, there appears to be a time limit on the market’s current optimism — mid-to-long dated BTC options remain skewed slightly towards downside protection. 
• On the other hand, despite a bigger move in spot, short-tenor vol smiles for ETH have not yet shifted positive in the same way as we see in BTC options. That may be a reflection of caution from ETH traders with fresh memories of a near 20% drop in Ether’s spot price only a few weeks ago. 

• While the crypto market marches forward, momentum has slowed down in US equity markets as we enter the third day of the US federal government shutdown. The S&P 500 eked out a very small gain of 0.062% yesterday, though the Nasdaq 100 climbed slightly higher at 0.37%.
• Wall St markets were flying in the dark yesterday amidst a temporary blackout in economic data yesterday too. The weekly initial jobless claims data has been delayed due to the government shutdown, and the non-farm payrolls report due later today may also be delayed. 
• US Treasuries also traded within a tight range yesterday with the lack of labour market data making it more difficult for traders to parse the health of the US economy. For now, 30-day Fed funds futures are near enough sure of an October rate cut however, with market-implied odds at 97.8%.
• In reference to the number of jobs President Trump is weighing to slash in order to ramp up pressure against the Democrats to end the government shutdown, White House press secretary Karoline Leavitt said yesterday “It’s likely going to be in the thousands” and that “We’re going to look at agencies that don’t align with the administration’s values, that we feel are a waste of the taxpayer dollar”.

• With the partial US government shutdown now in full effect, the SEC missed the original Thursday deadline to decide on Canary Capital’s spot Litecoin ETF, keeping the filing unresolved.
• This comes alongside the upcoming deadlines for a Solana spot ETF set for Oct 10, and XRP Oct. 17 which could be impacted by the shutdown.
• However, given the SECs previous announcement to streamline the ETF approval process, the standard 19b-4 deadlines may not carry the same significance. Instead, the S-1 registration route does not define a specific deadline leaving further uncertainty on approval dates, especially those predicted for an October approval.

• Trad-Fi derivatives exchange CME Group has announced an upcoming roll out of crypto futures and options “available to trade 24 hours a day, seven days a week” in early 2026, subject to regulatory approval. Although, it isn’t truly 24/7, since trading pauses for a scheduled two-hour weekly maintenance window when no orders can be executed.
• Trades will be “executed” in real time but for operational simplicity, clearing, settlement and regulatory reporting will be assigned the next business day.

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