OPTIONS DESKS DROP HEDGES INTO WARSH WEEK — TRADERS PRICING A CLEAN TAPE.

Bitcoin options desks are unwinding downside protection heading into Wednesday’s FOMC decision.

That means the desks pricing risk into the decision are pulling their hedges. Puts are getting sold. Vol is coming in. Traders are pricing a clean tape — either a cut, or a no-cut that lands without a Warsh surprise.

The Capitalist read: this is desks betting on their own read of Kevin Warsh’s first big rate decision as Fed Chair. Positioning has moved from defense to conviction. The books are unhedged. If Warsh delivers what they expect, the reflex is up. If he doesn’t, unhedged means asymmetric downside — the tape prices a bigger drop than options currently show.

The question the operator class needs to sit with: is this the desks reading Warsh correctly, or is it the last conviction trade before he surprises them?

The cap is still twenty-one million.