Most crypto positioning commentary treats "bitcoin options" as one thing. It is not. The same underlying exposure is expressed through at least four different instrument wrappers, each with its own settlement mechanics, pricing model, participant base and hedging channel. Aggregate them naively and you get a number that describes nothing. Read them separately and the disagreements between them become the signal.
The Wrappers Disagree, And That Is The Point
Here is the full crypto complex read at the same instant, before the US open on 17 August 2026. Gamma exposure is computed on settled open interest, so these are structural positions rather than intraday flow.
| Instrument | Wrapper | Spot | Regime | Net GEX | Gamma flip |
|---|---|---|---|---|---|
| MSTR | Equity proxy | 93.91 | Positive | +$26.86M | 93.26 |
| IBIT | Spot BTC ETF | 35.93 | Positive | +$3.98M | 35.90 |
| COIN | Equity proxy | 149.55 | Positive | +$1.41M | 147.17 |
| ETHA | Spot ETH ETF | 14.28 | Negative | −$2.00M | 15.23 |
| BTC=F | CME option on future | 63,470 | Negative | −$0.85M | 63,531 |
Read the regime column. Bitcoin exposure held through the spot ETF sits in positive gamma, where dealers dampen moves. The identical exposure held through CME futures sits in negative gamma, where dealers amplify them. Same asset, same moment, opposite hedging behaviour.
The proximity makes it sharper. BTC=F is trading 63,470 against a flip at 63,531, roughly 0.1% below its own zero-gamma level. IBIT is trading 35.93 against a flip at 35.90, about 0.06% above its own. Both books are balanced on the knife edge, on opposite sides of it. A move of a fifth of a percent in bitcoin flips one of them and not the other.
This is not an arbitrage and it is not a data error. Different books can carry genuinely opposite dealer positions because different people trade them for different reasons. The ETF book absorbs covered-call and overwriting flow from long holders; the CME book carries basis and macro-hedging flow from funds. Neither is "wrong". They are describing different populations.
The Four Wrappers
| CME options on futures | Spot ETF options | Equity proxies | Offshore | |
|---|---|---|---|---|
| Examples | BTC=F, ETH=F | IBIT, ETHA, FBTC | MSTR, COIN, MARA | Offshore venues |
| Regulated | Yes, CFTC | Yes, SEC / OCC | Yes, SEC / OCC | No |
| Settlement | Cash, CME reference rate | Physical, ETF shares | Physical, shares | Coin or perp |
| Pricing model | Black-76 on the forward | Black-Scholes on spot | Black-Scholes on spot | Varies |
| Hedged in | CME futures | ETF shares, then coin via AP | The equity itself | Coin or perp |
| Expiry ladder | Monthly, quarterly | Weekly, monthly, LEAPS | Weekly, monthly, LEAPS | Near-continuous |
| Participants | Funds, CTAs, basis desks | Advisors, overwriters, retail | Retail, vol funds, convert arb | Global, retail-heavy |
The row that does most of the work is "hedged in". A dealer short gamma on BTC=F hedges by trading CME futures. A dealer short gamma on IBIT hedges by trading IBIT shares, and only indirectly touches coin when authorised participants create or redeem. A dealer short gamma on MSTR hedges by trading MSTR stock, which is a leveraged, convertible-laden claim on bitcoin rather than bitcoin itself.
So the hedging flows land in different places. CME gamma transmits to the futures curve. ETF gamma transmits to ETF share volume. MSTR gamma transmits to a single equity whose relationship to bitcoin is itself unstable. Treating these as one aggregated "crypto GEX" number silently assumes a fungibility of hedging channels that does not exist.
The CME Book: Priced On The Forward
| Symbol | Contract | Multiplier | Tick | Settlement |
|---|---|---|---|---|
| BTC=F | Bitcoin, 5 BTC | $5 / point | 5 ($25.00) | Cash-settled |
| ETH=F | Ether, 50 ETH | $50 / point | 0.50 ($25.00) | Cash-settled |
Both are quoted in dollars per coin, so the multiplier is simply the contract size and there is no quote-convention trap of the kind that catches out Treasuries and grains. At 63,470 a bitcoin contract is about $317,000 of notional.
These are options on the CME future, so they are priced with Black-76 on the forward, not Black-Scholes on spot. Crypto futures trade in meaningful contango and backwardation, and that basis is a real component of the forward. Pricing these greeks off a spot index introduces an error that grows with tenor.
CME contract sizes are large. One bitcoin contract is 5 BTC, a few hundred thousand dollars of notional. Open interest counts therefore look small next to offshore venues while representing comparable dollar exposure. In the table above, the entire BTC=F hedging requirement for a 1% move is about 13 contracts, which is $850k of gamma, not a rounding error. Always compare in dollars, never in contracts.
Expiry structure matters too. CME crypto concentrates in monthly and quarterly cycles rather than the near-continuous ladder offshore venues offer, so gamma builds and releases on an equity-like rhythm. Classic expiry-week pin logic is more applicable here than anywhere else in crypto.
The ETF Book: Where The Overwriting Lives
IBIT is now the most consequential regulated bitcoin options book by participation, and it behaves unlike the CME one. Its positive net gamma of +$3.98M against a flip essentially at spot reflects a book dominated by call overwriting: long holders selling upside against ETF positions, which leaves dealers long gamma and therefore mean-reverting.
The Ether ETF tells the opposite story at the same moment. ETHA carries −$2.00M of net gamma with its flip at 15.23 against a spot of 14.28, meaning spot sits a full 6.7% below the flip. That is not a knife edge, that is a book decisively in negative-gamma territory, where dealer hedging amplifies moves in both directions.
ETHA is also the only instrument in the complex with negative vanna and negative charm exposure right now (−$29.3M and −$176k respectively). The practical reading: a volatility spike makes ETHA dealers sell delta, amplifying downside, where the same spike in IBIT or MSTR makes dealers buy. If you are looking for the fragile leg of the crypto complex today, the greeks are pointing at ether, not bitcoin.
The Proxies: MSTR Is The Largest Crypto Vol Book In Equities
MSTR carries +$26.86M of net gamma. That is 6.7x IBIT's and 19x COIN's. Its vanna exposure of +$324M is over twenty times COIN's $16.1M. By any exposure measure, the single largest concentration of crypto-linked options risk in the US equity market is not a bitcoin ETF. It is a software company's balance sheet.
That has a mechanical consequence. Dealer hedging of MSTR gamma requires trading MSTR shares, and the hedging requirement for a 1% move is roughly 286,000 shares. MSTR's stock is a levered claim on bitcoin with convertible debt layered on top, so options-driven hedging flow interacts with convert-arb hedging flow in the same tape. This is why MSTR moves are frequently larger than its bitcoin beta alone predicts.
COIN is the cleaner instrument of the two. Its net gamma is small (+$1.41M) but its delta exposure is large (+$222.7M, larger than MSTR's +$107.2M). Dealers hold a big directional book in COIN and a small convexity book. That combination produces steady hedging pressure rather than the reflexive squeezes MSTR is known for.
The Offshore Book: Big, And Not Your Hedging Channel
Offshore venues still hold the majority of global crypto options open interest, and any honest account has to say so. But size is not the same as relevance, and the reason is mechanical rather than ideological.
Offshore books are hedged in coin and in perpetual swaps. If you hold IBIT, no amount of offshore dealer hedging touches your instrument directly. It moves bitcoin, which moves the ETF's net asset value, which authorised participants arbitrage back into the share price. That is a real transmission path, but it is indirect, lagged, and it passes through a creation-redemption mechanism that only operates during US market hours.
Three characteristics make the offshore book behave differently from anything onshore:
- A near-continuous expiry ladder. Where CME concentrates in monthlies and quarterlies, offshore venues list expiries almost continuously. Gamma never builds into a single dominant date the way it does on CME, so expiry-week pin effects are weaker and more diffuse.
- Coin-margined contracts. Some offshore contracts are margined in the underlying coin, which makes the payoff non-linear in a way a dollar-denominated option is not. Exposure computed as though these were dollar-settled is wrong before you start.
- 24/7 trading. The book never closes, so it absorbs weekend flow that the onshore wrappers cannot. Much of the gap risk that shows up as a Monday move in IBIT was already traded offshore on Saturday.
The practical position: read offshore for the coin, read onshore for the wrapper you hold. Do not add them together.
Expiry: The One Week The Wrappers Converge
The wrappers spend most of the month telling different stories. Monthly expiry week is when they partially align, because that is the one date on which CME, the ETFs and the equity proxies all have material gamma rolling off simultaneously.
Three things happen at once. CME's monthly and quarterly concentration releases, which is the single largest scheduled gamma event in the regulated crypto complex. The ETF overwriting cycle resets, as covered calls sold against IBIT and ETHA positions expire or are rolled up and out. And the equity proxies clear their monthly chains alongside every other US equity.
The consequence is that the week after monthly expiry frequently has a different volatility character from the week before, and the strike maps you were reading are stale the moment the chains roll. Two practical rules follow:
- Re-read every wrapper after monthly expiry, not before. Walls computed on a chain that is about to expire describe a book that is about to cease existing.
- Expect the ETF dampening to weaken first. Overwriters who get assigned are out of the position until they re-establish it, so the long-gamma tilt that suppresses IBIT volatility is at its weakest in the days immediately following expiry.
Five Mistakes That Show Up Constantly
Aggregating into one "crypto GEX" number. The single most common error, and the one that makes everything downstream meaningless. The hedging flows behind each wrapper are executed in different instruments by different firms and never net.
Comparing contract counts. One CME bitcoin contract is 5 BTC, roughly $317,000 of notional. One IBIT contract is 100 shares, roughly $3,600. Open-interest counts across the two differ by about two orders of magnitude and mean nothing side by side.
Pricing CME greeks off spot. These are options on the future and price with Black-76 on the forward. At 10% annualised contango, feeding spot instead underprices a one-year at-the-money call by 23.8% and puts delta out by nearly seven percentage points.
Reading heavy put open interest as support. When puts at a strike outnumber calls by an order of magnitude, that is outright protection buying by holders, not two-way dealer positioning. It does not create the hedging bid that a genuine put wall implies.
Assuming the ETF book reflects overnight crypto moves. IBIT, ETHA, MSTR and COIN options trade US equity hours. The underlying trades continuously. A large weekend move in coin does not appear in ETF exposure until the equity market reopens, so exposure pulled on a Sunday describes Friday's book.
How To Read It
- Pick the wrapper that matches your risk. If you trade IBIT, IBIT gamma is your hedging tape. CME gamma is somebody else's.
- Regime before levels. Positive gamma means dealers dampen; negative means they amplify. Everything else is secondary.
- Treat divergence as information about who is positioned, not as an arbitrage. The wrappers are not fungible and the hedging flows do not net.
- Compare in dollars, never in contracts, especially across CME and the ETFs, where contract sizes differ by orders of magnitude.
- Watch distance to flip, not just sign. A book 0.1% from its flip is a different animal from one 6.7% away, even if both read "negative".
- Price CME greeks on the forward. Black-76, not Black-Scholes. The basis is not noise.
Pulling It Programmatically
GET /v1/exposure/summary/IBIT # spot bitcoin ETF, full greek summary
GET /v1/exposure/gex/MSTR # equity proxy gamma by strike
GET /v1/exposure/summary/ETHA # ether ETF - watch the negative vanna
GET /v1/exposure/gex/BTC%3DF # CME bitcoin gamma by strike
GET /v1/stock/IBIT/summary # incl. IV term structure
Equity and ETF symbols (IBIT, ETHA, MSTR, COIN) are ordinary tickers. Futures symbols take the =F suffix with = URL-encoded as %3D, and require the Growth plan or higher. Everything that works for an equity works across the complex: GEX, DEX, VEX, CHEX, levels, max pain, the volatility surface and the exposure summary.
Crypto dealer positioning is not one book, it is four, and on 17 August 2026 they disagreed about the sign of dealer gamma while bitcoin sat within 0.1% of the CME flip and IBIT within 0.06% of its own. That disagreement is structural, not spurious: each wrapper is priced differently, hedged in a different instrument, and held by a different set of people. Read the wrapper that matches your risk, compare exposure in dollars rather than contracts, price CME greeks on the forward rather than spot, and treat cross-venue divergence as information about who is positioned rather than as a trade.
Originally published at flashalpha.com.
Top comments (0)