On Friday 31 December 2021, a total of 129,800 options contracts will expire. These options contracts amount to about $6 billion in estimation. So far this 2021, the derivatives market has seen 24 options contract expirations.


![UE5D3BLV3FAADESZTZZ7CA4BLM.png](https://files.peakd.com/file/peakd-hive/tomlee/EoKCaRRheTNkBMcLmTd8JofYZ6VBWThUAcDKpTNrj8thaHSMskZgnDNPTPFL4v6Cyr5.png)
[source](https://www.coindesk.com/learn/2021/09/22/bitcoin-eyes-3b-september-options-expiry-after-a-drop-to-40k/?outputType=amp)


Now, you may be asking, how does this concern the spots market? Or better still, you may ask to know the impact of options expiry in general on the spots market. These things you will find answers to as you continue to read. 

It might interest you to know that the influence of the options market on the Bitcoin's spot market has been seen over the years in the space. More so, it's influence continues to increase in the overall market. Also, it doesn't seem as though it will cease happening this way soon. This is so because there's always a relationship between the options and spots market. 

Noteworthy is that the derivatives market include the futures market and the options market. Now, options contracts expiry can affect the market both positively and negatively. In most cases, options expiration always have a negative impact on the spot market. More often than none, it causes bleeding in the market. It induces some kind of fear into spots traders therefore, panic selling sets in resulting in a price decline of assets. However, it is only in rare cases that prices stay stable or takes the upward direction. 

##### What is Options Trading/ Contract

Like aforestated, options trading is a type of derivatives trading. According to [Investopia](https://www.investopedia.com/terms/o/optionscontract.asp), _"an options contract is an agreement between two parties to facilitate a potential transaction on an underlying security at a preset price, referred to as the strike price, prior to or on the expiration date."_

Options trading have two sub-sets which are: Call and Put options. These two are similar to Long and Short in the futures market. Both Call and Long can be described as a leveraged bet on the price increase of a certain asset. While the Put and Short is also an action taken on a certain asset predicting that the price of the said asset will plummet. If the bet or prediction goes in your favour, you gain but if it goes south, the reverse will be the case. 
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#### What is Option Expiry?
What comes into your mind when you hear options contract expiration? Many things I guess but I'll try to help you understand it in simple terms. 

In a derivatives trading such as options trading, there is always an expiration date. This expiration date is the last day for which an options contract remains valid. After this day, the contract has expired and the expiration date can result in different outcomes.

Before the options expiry, owners are given the opportunity to take a decision on their position. The few decisions owners can exercise are: closing the position to realize their profit or loss, or letting the contract expire worthlessly. Many a times, options owners close position to take profits or options are often manipulated by traders to close worthlessly. 

This often results in a short-term price decline. Concerning Friday's (December 31, 2021) options expiry, the maximum pain price for BTC is speculated to be at $48,000. This implies that BTC could decline to $48,000. However, this is the Crypto market and no one can be a hundred percent accurate. Therefore, we should not erase the mindset that things could turn out very differently. 

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