Gate Research: Implied Volatility at High Levels, Hedging Demand and Volatility Structure Rising

On the capital side, crypto ETFs have recorded USD 1.26 billion in net outflows this month, reflecting a clear decline in institutional risk appetite. In an environment of tightening overall liquidity, demand for downside protection in the options market has risen, with short-dated put IV climbing and overall implied volatility increasing accordingly.

Options Market Dynamics

Latest data shows BTC implied volatility at 50.9% and ETH at 75%, both oscillating at elevated levels—signaling the market continues to expect strong future volatility.

In terms of skew structure, around November 10, the 25-delta skew for both BTC and ETH saw a brief steepening. Short-dated (7D) skew fell to around –9 vols for BTC and –10 vols for ETH, reflecting increased demand for hedging as short-term volatility intensified. Meanwhile, medium- and long-term skews remained relatively stable, suggesting limited overall bearish sentiment—the shifts were primarily driven by short-term emotional swings.

BTC’s realized volatility (RV) has risen to around 53%, and the volatility risk premium (VRP = IV − RV) has shifted from positive to negative, indicating that the market may now be underpricing future volatility. ETH’s RV has risen to roughly 83%, with its VRP also turning negative this week. With risk appetite improving, implied volatility appears relatively undervalued, giving buyers of volatility strategies a relative advantage.

Block Trade Structures

This week’s dominant block trades in BTC and ETH options were mainly short- to medium-term bearish structures with hedges against upside risk, suggesting investors aim to participate in short-term downside moves at lower cost while maintaining prudent risk management. The largest BTC and ETH block trades were:

• BTC: Buy BTC-281125-116000-C, sell BTC-211125-107000-C, with about 1,500 BTC traded and roughly USD 96,000 in premium paid. This expresses a view of mild downside while hedging against sharp upside tail risk.
• ETH: Buy ETH-051225-4000-C, sell ETH-281125-4000-C, totaling 14,000 ETH with about USD 230,000 in premium paid—indicating low-cost positioning for a moderate short-term decline.

Platform Updates

Gate has officially launched options for HYPE, SUI, and BNB, continuing to enhance its derivatives product suite and improving market depth and coverage. At present, Gate supports USDT-settled options for major assets including BTC, ETH, SOL, DOGE, ADA, LTC, TON, XRP, and more—offering users a broader set of instruments and strategic tools.

In today’s environment of heightened volatility and pronounced market differentiation, these newly added products help investors execute more flexible asset allocation, directional trading, and hedging strategies via the web interface or the mobile app, improving strategy execution efficiency for advanced traders and institutional users.

Details：https://www.gate.com/options/BTC\_USDT