A calendar month agone, one would exist difficult pressed to find any investor who would accept expected a $32,000 Bitcoin (BTC) toll for January. At the fourth dimension, a 140% upside was needed from the $13,300 price on Oct. 30 and this seemed quite far fetched.

Therefore, the January $32,000 BTC call (buy) options traded at Deribit for a meager $67, or 0.005 BTC in tardily Oct.

BTC $32,000 Jan. 2021 telephone call choice, in BTC. Source: Deribit

Fast forward to now, and the same call pick peaked at $705. That'south an almost 10x gain in less than four weeks. Keep in mind that despite the rally to $19,484, an boosted 67% upside is still needed to achieve $32,000.

BTC Jan. 2021 call option market. Source: Deribit

Albeit the recent BTC price increase, the unsaid options probability (delta) currently sits at 11%. That telephone call pick cost has also increased due to the BTC volatility change equally sellers will request a more substantial premium for taking the risk during uncertain markets.

Intense price swings, regardless of the direction, will push button volatility higher and whatsoever unexpected newsflow normally drives the indicator upwards.

Bitcoin 3-month options unsaid volatility. Source: Skew

Have observe of how BTC volatility spiked from 57% on 30 Oct. to 78% this week. This event is notably bullish for call option buyers. Even if the BTC price had stayed the aforementioned, the option price would have climbed accordingly.

Don't take options probabilities literally

Options pricing is also heavily dependent on how distant the decease date is. This same $32,000 phone call might be deemed worthless two days alee of maturity. Therefore, traders should non fixate too much on unsaid options probability (delta).

BTC Dec. 2020 phone call pick market. Source: Deribit

By looking at phone call (buy) options for Dec. 25, an investor might infer that the 26% odds for $20,000 seems dim. Subsequently all, an xviii% pump in a month seems unreasonable. Traders tend to have a short-term memory, just an 18% increase in 30 days happened in ix out of the past 12 months.

Bitcoin price (USD) at Bitstamp. Source: TradingView

The last time an 18% or even larger monthly pump happened was not so long agone. On Aug. 23 Bitcoin closed at $eleven,645, which was a 22% increment from the previous month.

Traders and investors should consider ownership call options with longer death dates. Those who were brave enough to bet on the 150% BTC toll increase a month agone are extremely satisfied with the results.

The views and opinions expressed here are solely those of the autho r and practise not necessarily reflect the views of Cointelegraph. Every investment and trading move involves take chances. You should conduct your ain research when making a decision.