Options for the spot trader: the minimum that explains the strange Fridays

Crypto's options market has grown big enough for its tail to wag the spot dog. A spot trader does not need the greeks - just three effects.

Three options effects on spot

• Expirations. Large quarterly expiries (the last Friday of the quarter) concentrate enormous positions. Ahead of them the price often "sticks" to levels where option payouts are minimal (max pain) - not a conspiracy but a consequence of market-maker hedging.
• Gamma regimes. When dealers are hedged "long gamma", their robots sell rallies and buy dips - the market is viscous, range-bound. In "short gamma" it is the opposite: hedging amplifies any move - hence the days when the market flies with no news.
• IV as the fear thermometer. Implied volatility is the price of insurance. IV spiking on a decline - panic (the bottom is often near); low IV after a long calm - the market has "fallen asleep", and a sharp move is statistically ripe.

The practical minimum

Know the quarterly expiration dates; do not be surprised by the magnet to round levels in those weeks; read low IV as the calm before a move, not as "stability". We flag the big expirations in the feed.