Options markets are showing a flurry of action with bets on higher prices in the days ahead, Nomura’s market making arm Laser Digital flagged in a note shared with CoinDesk on Tuesday.

Bitcoin volatility has been quiet for most of the past week. Traders were not buying much in the way of options protection, and the price was not moving fast enough to justify it. When desks did pay for protection, they paid more for puts (bets on the price falling) than calls (bets on it rising) – the standard playbook in a market that is more worried about a drop than excited about a rally.

But underneath that, there has been quiet demand for cheap upside bets, structured through what traders call call ratio strategies. The trade involves buying call options that pay off if bitcoin rallies a little, and financing those by selling other call options that only pay off if bitcoin rallies a lot. The setup costs almost nothing upfront and benefits if bitcoin grinds higher without ripping past the upper level.

“Should the spot price experience a decisive breakout above $80K, the currently negative BTC risk reversal is expected to move into positive territory,” the note said.

A risk reversal is the difference in implied volatility between equally out-of-the-money calls and puts. When it sits negative, the market is pricing more fear of a drop than greed for a rally.

A flip to positive would be the first signal that options markets have actually shifted from cautious to constructive.

All major central banks held rates last week, which Laser Digital said reduces the right-tail distribution of rates and keeps U.S. financial conditions in their current range. Strategy reports earnings Tuesday, and the U.S. nonfarm payrolls print drops Friday. Both can move bitcoin if the surprise is large enough.

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(CoinDesk Data)

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What to know:

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