Ethereum options implied volatility may rise before the end of May

ChainCatcher message, as the U.S. SEC is highly unlikely to approve two spot Ethereum ETF applications, Ethereum options traders are preparing for volatility at the end of the month. May 23 and May 24 are the deadlines for the SEC to decide whether to approve the spot Ethereum ETF applications submitted by VanEck and ArkInvest/21 Shares, respectively.

According to Wintermute OTC trader Jake Ostrovskis, the current market believes that the chances of these ETFs being approved before the end of May are only 16%. He added that the implied volatility of Ethereum options may rise before the end of the month, especially around the time the SEC is expected to make a decision on the Ethereum spot ETF.

Ostrovskis explained, "There is a slight distortion in the implied volatility term structure of Ethereum. The pricing for May 31 is around 60%, after which the market flattens out, and then rises again from June to the end of the year. This is 8 points higher than the Bitcoin volatility premium, with Bitcoin volatility at about 52%."