Definition ∞ Options expiry impact refers to the influence that the expiration of derivative contracts, specifically options, can have on the price movements of the underlying asset. As options near their expiry date, traders may adjust their positions, leading to increased volatility or price shifts as they hedge or close out contracts. Large volumes of expiring options can create significant buying or selling pressure. This phenomenon is a recognized factor in short-term market dynamics.
Context ∞ In cryptocurrency markets, options expiry impact is a notable event, particularly for major digital assets like Bitcoin and Ethereum, where large-scale options contracts trade on derivatives exchanges. Analysts frequently monitor upcoming options expiry dates to anticipate potential price volatility or directional bias. The “max pain” theory, suggesting prices gravitate towards the point where the most options expire worthless, is a common discussion point in crypto market analysis surrounding these events.
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