In recent observations from the Q4 13F filings, major options market makers, including Jane Street, Citadel, and JPM, have significantly increased their long volatility exposure to options linked to IBIT, a Bitcoin ETF, with some firms reporting increases as high as 690% in call options. This surge in buying activity suggests a corresponding short position held by other institutional players, which could lead to a significant “blow up” if concentrated among a few funds, as the filings do not require reporting of short positions. As market makers typically provide liquidity by assuming the opposite side of client trades, this massive repositioning reflects heightened activity in reaction to the growing interest in crypto-linked derivatives.
Options Market Makers Boost Long Vol Exposure on iShares Bitcoin Trust
