Bitcoin $40,000 Put Option Emerges as Major Position Ahead of February Expiry

The $40,000 put option has become one of the largest open positions in the Bitcoin derivatives market ahead of the Feb. 27 expiry, reflecting heightened demand for protection against further price declines. Data from Deribit show roughly $490 million in notional value tied to the $40,000 strike, making it the second-largest concentration of open interest by strike.

Put options give traders the right to sell Bitcoin at a predetermined price before expiration and are commonly used as insurance during volatile market conditions. Bitcoin has fallen nearly 50% from its October peak and is currently trading near $66,000, prompting increased hedging activity.

Max Pain Level and Expiring Notional Value

Approximately $7.3 billion in total Bitcoin options notional value is set to expire at month end. The largest strike by open interest sits at $75,000, with around $566 million positioned at that level. This strike also represents the so-called “max pain” point, where the highest number of contracts would expire worthless.

While call contracts still outnumber puts, the sizable buildup at lower strikes indicates traders are balancing upside exposure with meaningful downside protection.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.