Activity in the options market for alternative cryptocurrencies (altcoins) has increased this week, driven by significant market volatility that has prompted traders to pursue derivative instruments for both hedging and speculative opportunities.
During this week, trading volumes for XRP options have surged, exceeding $5 million, particularly with a focus on options with shorter expiration dates. Most of the trades have involved a mix of put options priced between $1.80 and $1.98, along with call options ranging from $1.80 to $1.93.
“This trading behavior indicates that market participants are preparing for notable short-term price fluctuations—whether triggered by regulatory news or potential breakout patterns—illustrating a nearly equal split between bullish and bearish positions,” stated the head of institutional sales at a trading platform.
The balanced flows align well with the recent price swings, including XRP’s drop to a five-month low of $1.61 earlier this week, before rebounding back to $2. This type of market option allows buyers the right, but not the obligation, to acquire the underlying asset at a specific price by or before a certain expiration date, where call buyers generally anticipate price increases, and put buyers aim to profit from price declines or secure against them.
Similarly, hedging has been observed in SOL options, where traders are targeting put options between $104 and $121. The Solana blockchain’s SOL token briefly dipped to $95 amid heightened risk aversion linked to U.S.-China trade tensions but has since recovered to around $115.
Notably, traders have also shown interest in the upside of Dogecoin, the leading meme-based cryptocurrency, which fell to 13 cents early in the week but has since climbed to 15.7 cents. Dogecoin has seen a significant reduction of over 65% from its December high of 48 cents.
The most actively traded calls have been at 14.5, 15.5, 17.5, and 18 cents, all set to expire on April 13, reflecting a speculative surge among investors.
“This indicates a strong inclination toward momentum trades—short-dated, low-premium bets targeting quick price surges, potentially influenced by social media activity or event-driven catalysts,” explained the institutional sales head. “[In general], short-dated expirations and directional trading are pushing altcoin options into the limelight.”
Nevertheless, the altcoin options sector remains significantly less robust compared to the Bitcoin and Ether options market, which sees multi-million dollar contracts traded daily.