Gate Research Institute: Low volatility in the options market is building up, with funds favoring bullish spread structures

Market Overview

In 2025, Bitcoin follows a typical path of “high-level start—surging to new highs—oscillating and pulling back”: in the first half of the year, driven by spot ETF funds, it briefly surged above $120,000; then, affected by macro uncertainties and profit-taking, it retreated multiple times to the $70,000–$80,000 range, and ended the year consolidating at $80,000–$90,000. Volatility clearly converged, completing the digestion of positions after the bull market peak. Looking ahead to the start of 2026, as macro liquidity marginally improves and implied volatility (IV) remains low, the market may enter a high-position buildup phase; if trading volume and actual volatility recover in tandem, BTC and ETH will stage a phased breakout upward.

Options Market Dynamics

Latest data shows BTC IV has fallen back to 43%, and ETH IV has dropped to 60%. Currently, ETH IV has fallen into a historically low percentile of 1.4%, indicating market pricing of short-term volatility has significantly converged.

From the recent week’s BTC 25-Delta skew trend, overall skew across different maturities has slightly risen and negative skew has converged, reflecting a market easing of downside risk pricing. Medium to long-term (30D–180D) skew remains stable, still in negative territory, indicating stable pricing of medium- and long-term downside risks.

ETH skew remains negative overall but continues to converge. Short-term put skew initially steepened then declined, indicating cooling of short-term hedging demand; medium- and long-term skew changes little.

In the past week, BTC’s VRP first turned negative then positive: early in the week, RV was higher than IV, making VRP negative; then RV rapidly fell back while IV lagged, turning VRP positive and slightly widening, returning option pricing to a neutral cautious level. ETH’s RV dropped sharply, while IV remained relatively unchanged, causing VRP to spike mid-week to +14 vols.

Block Trade Structure

This week, in the BTC and ETH options markets, block trades mainly involve bullish spreads. On Friday, approximately $2.1 billion worth of BTC and ETH options will be settled. The largest block trades are as follows:

• BTC: Bought BTC-300126-100000-C, totaling about 3,225 BTC, with a net premium expenditure of approximately $3.05 million
• ETH: Bought ETH-300126-3500-C, sold ETH-300126-3000-C, totaling about 5,000 ETH, with a net premium income of approximately $720,000

Platform Updates

Gate exclusively launches a convenient options trading tool—the rolling sell options product—to assist users in automatically and continuously selling options within a set period. Users can customize delta/strike execution, expiration dates (T+1/T+2/T+3), selling price methods, quantities, and optional take-profit and stop-loss parameters. The strategy will automatically execute opening positions daily at 9:00 (UTC) and seamlessly transition to the next cycle after expiration, enabling fully automated operation. This feature supports clear risk indicator displays, margin estimates, expected trading paths, and other auxiliary information to help users manage strategy execution more intuitively.

Rolling sell options product description: https://www.gate.com/help/other/options/48493