Ether (ETH) price gained 14% from its Sept. 6 low at $320, but this month’s futures and options expiry is less than two weeks away. As its price is still pinned below $400, this raises the question of exactly how confident are derivatives traders of a 9% recovery to $400?
By analyzing options model pricing, investors can easily conclude that traders are pricing in the 34% odds of Ether reaching $400 or higher. Still, the Black & Scholes options model main issue is heavily dependent on the number of days until expiry.
The odds for the same $400 level on Nov. 27 rise to 52%, regardless of how optimistic investors are for the Ethereum 2.0 launch date or the altcoin’s growing use in decentralized finance platforms.
Ethereum’s volatility leaves room for surprises
Volatility is the central indicator of intense price swings, although it does not infer a positive or negative direction.
Historical volatility exclusively measures past movements and is