1 Million Contracts of $4 XRP Call Options Traded Despite Price Decline
XRP call options at the $4 strike have seen significant trading activity this week, despite a price decline.
- One million contracts of the $4 call option expiring on December 26 were traded via a block trade on Monday.
- Contracts on Deribit are sized at 1,000 XRP.
- The $4 call indicates expectations that XRP's price will exceed this level by the end of December.
- The increased activity may reflect a covered call strategy rather than bullish sentiment.
- This strategy involves writing higher strike out-of-the-money calls against existing holdings to generate extra yield.
- The large block trade likely involved a user writing the call, with market makers acquiring it for liquidity.
- XRP's price briefly dropped to $2.94 but stabilized above $3 following a market downturn.
- Prices previously peaked over $2.6 last month.
