An institution recently set up a multi-legged strategy in Derive's onchain options market, generating a notable $25 million in trading volume. This strategy aims for maximum profit if Bitcoin (BTC) climbs to $80,000 by the end of November.

As the U.S. election approaches, there's been a surge in betting and hedging related to this political event. This increased activity is driving significant trading volume in the crypto market. The outcome of the election could have major implications for cryptocurrency regulations in the United States.

Earlier this week, Derive reported that an institution engaged in a multi-legged Bitcoin options strategy. They are betting on BTC's continued rise after the November 5 election. This trade generated a notional trading volume of $25 million, making it the largest onchain options transaction tied to the U.S. election.

The institution purchased 100 call option contracts with a strike price of $70,000, set to expire on November 29. At the same time, they sold 200 contracts of the $80,000 call and 100 contracts of the $50,000 put, both also expiring on November 29. They used eBTC—bitcoin generated via EtherFi—as collateral, which allows them to earn passive yields on that amount.

This strategy resembles a ratio call spread funded by a short put position. It will be most profitable if Bitcoin rallies to $80,000 by November 29. This positioning aligns with options flows seen on centralized exchanges, indicating expectations for a post-election rally to $80,000 or even higher.

Nick Forster, co-founder of Derive, explained, “This $25 million options trade marks a pivotal moment for onchain options trading. It could have significant implications after the election. The institution has strategically structured a unique combination of sold puts, bought calls, and eBTC collateral. They could potentially make $1,020,000 if BTC hits $80,000 by November 29, not counting any gains from the eBTC collateral.”

Forster added, “This trade is a prime example of how onchain options provide scalable, non-correlated yield for any onchain asset.”

Derive is currently the largest onchain options platform, accounting for 32% of the total decentralized exchange (DEX) options volume, which is $339 million in the past 24 hours, according to DeFiLlama. However, the onchain market remains relatively small compared to Deribit and other centralized platforms, which report a cumulative 24-hour volume in the billions.