The United States Securities and Exchange Commission, or SEC, is expected to rule on Oct. 18 whether to approve an application from asset director ProShare Uppercase Direction for a Bitcoin exchange-traded fund (ETF).

Equally previously reported past Cointelegraph, SEC Chairman Gary Gensler recently suggested that the regulator is more than inclined to approve indirect-exposure Bitcoin futures ETFs nether the Investment Company Deed of 1940.

On Oct.fifteen, the Nasdaq Stock Market certified the registration of Valkyrie'southward Bitcoin Strategy ETF shares for listing. The deadline for the SEC to officially approve Valkyrie's ETF application is Oct. 25, but this could be extended to December. viii.

$70,000 call options see their implied probability hit 25%

Ii weeks ago, it would have been a daunting task to notice an investor willing to bet on a $70,000 Bitcoin (BTC) cost for Oct. 29. A 62% upside was needed from the $43,100 price on Sep. thirty, and this seemed far-fetched at that time. Therefore, the Oct. $seventy,000 BTC call (buy) options traded on Sep. 30 at Deribit for $194, or 0.0045 BTC.

Bitcoin Oct. 29 call options price in BTC. Source: Deribit

Every bit shown above, the aforementioned choice is currently trading at $1,570, or 0.0262 BTC, as Bitcoin rallied by 39% calendar month-to-date to $sixty,000. So, even though this is still a long mode to become for the $70,000 phone call option, the odds have significantly increased.

Even with the BTC price increase, the implied options probability (delta) currently sits at 25%, which might audio bearish at first sight.

Traders should not accept options probabilities literally

Options pricing is heavily dependent on how distant the death date is. Considering Bitcoin'due south 4% daily volatility, anything can happen alee of the Oct. 29 options expiry. Therefore, traders should not fixate too much on options implied probability (delta).

To amend assess the odds of Bitcoin's ETF approving past the end of the calendar month, ane should use the $fifty,000 delta equally the 'base of operations' scenario. Traders should assume that a 17% cost drib would betoken that the decision by the U.S. SEC was either delayed or rejected.

Considering that the $l,000 telephone call selection is trading at an 84% delta, or implied probability, investors are pricing a xvi% odds for a doomsday scenario.

Meanwhile, the $70,000 call option for October. 29 at 8:00 am UTC, which indicates that the ETF has been approved, presents a 25% implied probability. Options markets undoubtedly show higher odds for a positive move, only this is far from a certainty.

The views and opinions expressed here are solely those of the author and practice not necessarily reverberate the views of Cointelegraph. Every investment and trading move involves risk. You lot should conduct your own enquiry when making a conclusion.