A significant SOL options block trade crossed the tape on Deribit via OTC network Paradigm late Monday, suggesting expectations for a price rally to $400 by the end of February.
The trade, structured as a bull call spread, involves a long position on the $280 call and a simultaneous short position on the $400 call, with 10,000 contracts for each leg and both legs scheduled to expires on Feb. 28, according to block flows monitored by Amberdata. Block trades are large orders often placed by institutions that are executed over-the-counter (OTC), outside the order book of the exchange.
A bull call spread achieves its maximum profit when the price of the underlying asset is at or above the strike price of the short call, which is $400 in this case. Buyers are betting that the spread will exceed $280, reaching as high as $400 with a breakeven around $300, according to Amberdata’s Director of Derivatives, Greg Magadini.
Importantly, the downside risk in a bull call spread is limited to the total premium paid to establish the strategy, protecting the trader from greater losses if the market declines. Currently, SOL is trading at $254 after hitting a record high above $290 over the weekend, according to CoinDesk data.
