Against the Odds, Some Bitcoin Traders Are Betting on a $36K Price by Year's End

The Deribit crypto derivatives exchange is seeing increasing investor interest in bitcoin options that would profit from prices rallying as high as $36,000 by the end of 2020.As of Sunday, call options at $36,000 and $32,000 strike prices expiring on Dec. 25 were seeing the most daily positions opened.

A call option gives the holder the right but not the obligation to buy the underlying asset at a predetermined price on or before a particular date.

Open interest refers to the number of contracts traded, but not squared off with an offsetting position.

The most new open positions were seen in the $36,000 December call, with 752 contracts.

Buy positions in the out-of-the-money $36,000 and $32,000 calls were executed during Sunday's European trading hours when the liquidity was low.

These traders paid significantly more in costs than they would have incurred on a weekday.

The aggressive weekend trading is a little perplexing, given the options market sees a very low probability of prices reaching a new record high above $20,000 by the end of December.

The odds of bitcoin setting a new lifetime high over $20,000 by the year's end are just 5%, the data suggests, while the likelihood of prices crossing $28,000 is 2%.Further, the market sees only a 9% chance of bitcoin crossing above $20,000 by the end of Q1 2021.While prospects of bitcoin rising to $36,000 are quite low, these deep out-of-the-money options are not expensive.

In other words, the maximum loss in this trade is limited to the extent of the price paid to buy the option.

That may have motivated these weekend traders to take a long shot on a new ATH.At press time, bitcoin is changing hands near $10,420.