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Options Traders Brace for Volatility as BNB Nears Record High

Jun 3, 2024
    BNB is less than 10% away from its record high of $705.Options traders remain cautious with purchases of puts with strikes from $550-$650.BNB has been performing well due to high participation in Binance Launchpad and Launchpool projects.
As a seasoned crypto investor with a keen interest in Binance and its native token BNB, I’m thrilled to see the token’s impressive performance over the past few days. With BNB currently trading at $663, it’s less than 10% away from its record high of $705, a level that seemed unreachable just a week ago.The price of Binance’s native token, BNB, is nearing its record high of $705 following a significant increase of over 10% since hitting a recent low of $597 on Sundays.
I’ve analyzed the current market trends and found that BNB is now priced at $663, representing a 6.25% increase within the last 24 hours. In contrast, the CoinDesk 20 Index (CD20) has only recorded a minimal gain of 0.23% over the same timeframe.
As a researcher studying the cryptocurrency market, I’ve noticed an uptick in interest for certain tokens, particularly those that have gained traction through Binance Launchpad and Launchpool. These platforms encourage users to buy and hold BNB tokens in order to qualify for a share of newly-issued tokens during launches. The latest example is the Telegram-based gaming token notcoin (NOT).

As a researcher studying the financial markets, I’ve noticed that trading volume has reached approximately $3 billion in the past 24 hours. In response to this heightened activity, options traders are exercising caution by opting for put options with strike prices ranging from $550 to $650. This strategy allows them to hedge against potential downside risks in the market.

Approximately 11,250 BNB call and put options have been traded on PowerTrade, with call strikes set between $600 and $700, and put strikes ranging from $550 to $650. According to Bernd Sischka, PowerTrade’s chief commercial officer, traders are anticipating significant price fluctuations as BNB approaches its 2024 peak values.

An option is a type of financial contract allowing the holder to take advantage of the underlying asset’s price movement within a specific timeframe and at a predetermined price. By purchasing call options, investors are essentially betting that the asset’s value will rise, while buying put options represents a wager that the asset’s value will decrease before expiration.

As a crypto investor holding BNB options, I can tell you that out of the total $7.5 million in open interest for these contracts, a significant number of put options might expire without any value if BNB keeps climbing or maintains its present position.

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2024-06-04 18:55