Key Takeaways:

• Trading volume in IBIT $30 and $35 strike puts expiring in May 2025 and January 2026 topped 10,000 contracts on Friday.
• The surge in volume likely indicates cash-secured selling of these options, according to Greg Magadini from Amberdata.

Recently, there has been a notable rise in trading volumes of put options associated with BlackRock's Nasdaq-listed Bitcoin ETF (IBIT). Despite potential bearish interpretations, this increase may reflect strategic trading rather than outright negative sentiment.

On a recent Friday, over 13,000 contracts of the $30 out-of-the-money (OTM) put option changed hands as the ETF observed a 1.7% increase to $57.91. The trading volume for the $35 put option expiring on January 16, 2026, surpassed 10,000 contracts.

Most market participants appear to be engaging in 'cash-secured put selling' to generate passive income instead of making bearish bets. Put sellers assume the risk of purchasing the underlying asset at a predetermined price, thereby generating income through premiums received for selling the puts.

Quote from Greg Magadini:

"The $35 puts for Jan 2026 traded +10k contracts... potentially cash secured put selling flows (for traders who missed the rally)."

Moreover, IBIT calls continue to trade at higher levels compared to puts, reflecting bullish sentiment across options related to Bitcoin.