Large traders of Solana expect SOL to exceed 200 Dollars by the end of June | CoinDesk JAPAN

• The native token of the Solana blockchain, SOL, surged 85% in 4 weeks, reaching $176 from a low of $95.
• Block traders are rushing to the $200 call options that expire on June 27.
• Market makers and dealers are left with negative gamma exposure.

The native token SOL of the programmable blockchain Solana has shown a rapid increase of 85% over four weeks since April 7, rising at more than twice the pace of Bitcoin (BTC). Large options traders are building positions in anticipation of further increases.

This token has recently risen to around 176 as both the cryptocurrency market and traditional markets increase their risk tolerance. Bitcoin, the largest cryptocurrency by market capitalization, has risen by 40% according to CoinDesk data.

If the predictions of block traders (mainly market participants such as institutional investors who execute large trade orders in the over-the-counter market) are correct, this rise is expected to have a low possibility of reversing in the short term. They are indicating that they have purchased a large number of call options with a strike price of 200 dollars, expiring on June 27, listed on Deribit, anticipating that the price will exceed that level by the end of the first half.

"Traders bought up $200 in June options last week, the largest block trade, with a total of 50,000 contracts traded and a premium of $263,000," Greg Magadini, director of derivatives at Amberdata, said in an email. In Deribit, one option contract represents 1 SOL.

A call option gives the buyer the right, but not the obligation, to purchase the underlying asset at a predetermined price on the exercise date. The buyer of a call option is showing a bullish outlook towards the market. This is similar to buying a lottery ticket, where there is a possibility of making a large profit if they win, while only risking the amount paid at the time of purchase.

Mr. Magadini added that these call options surged with an annualized implied volatility (IV) of 84%. In other words, traders perfectly timed their entry, accumulating calls while SOL's IV typically fluctuates in the low three-digit range.

According to the data, due to the demand for $200 call options, market makers and dealers have ended up with significant net negative gamma exposure at the strike price.

Market makers with net negative gamma exposure engage in a "trend-following" hedge by buying more when prices rise and selling more when they fall, aiming to rebalance their portfolio to a delta-neutral (market-neutral) position. Their hedging activities tend to amplify market fluctuations.

Therefore, it can be said that SOL has the potential to exceed the $200 threshold, and the likelihood of increased volatility is high.

[Gamma exposure of dealers/market makers in SOL options expiring on June 27: Amberdata]