Ethereum (ETH) sees massive $250 million bet, hinting at possible price surge on horizon
A calendar spread involves buying and selling two options of the same type with the same strike price but with different expiration dates. Risk reversal, on the other hand, is an options strategy that combines buying and selling calls and puts to reduce risk. The fact that both of these sophisticated investment strategies are being used indicates that experienced and knowledgeable investors are getting involved.
The unidentified whale behind these trades has seemingly taken advantage of the lower implied volatility (IV) for the monthly delivery period. In options trading, IV is a measure of the market's expected volatility of a security's price. A lower IV usually indicates a lower expected volatility, suggesting a more stable price.
However, the whale's strategy to go long on both volatility and price can be seen as a bullish sign. This could indicate that the trader expects both an increase in Ethereum's price and a rise in its volatility. This kind of activity is typically a sign that the market is gradually gaining strength, which could suggest a more significant price movement on the horizon.