An options trader has placed a large bet on increased volatility in XRP, opening a long straddle at a strike price of $1.16 ahead of its expiry on 28 August.
The position involves the purchase of two million contracts, with about $62,000 paid in premiums. Rather than backing a rise or fall in XRP specifically, the trade reflects an expectation that the cryptocurrency could make a significant move in either direction before the options expire.
The transaction was made as XRP prices surged, putting renewed focus on the token’s near-term price behaviour and the possibility of larger swings in the market.
A long straddle involves buying both call and put options at the same strike price. In this case, the relevant level is $1.16. The strategy is designed to benefit from a substantial move away from that level, whether XRP rises above it or falls below it by the expiry date.
For the trade to deliver a return, XRP will need to move far enough in either direction to outweigh the premium paid for the contracts. The trader is therefore positioning for volatility rather than taking a straightforward bullish or bearish view.
The $62,000 premium represents the cost of securing the options and limits the initial amount at risk to that payment. The size of the position, however, makes it a notable wager on XRP’s expected movement over a short period.
The options are due to expire on 28 August, giving the trade a defined timeframe in which the anticipated price action would need to take place. Until then, the position will remain focused on whether XRP can move decisively away from the $1.16 strike.
The deal was reported as a $2m bet on XRP volatility, with the two million-contract straddle crossing the market as prices moved higher. Its structure means the trader does not need to predict the direction of XRP’s next major move. Instead, the central view is that the token will not remain close to the strike price.
If XRP makes only a limited move around $1.16 before expiration, the options may not generate enough value to cover the premium. A more pronounced move in either direction would be more consistent with the strategy’s objective.
The trade is consequently a short-term wager on a sharp change in XRP’s price, with 28 August marking the key deadline for the position.
