Gold Options Divide: Bybit traders vs. TradFi venues - who's misreading the market?
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Bybit recently launched XAUT options – options contracts that settle to the price of Tether’s XAUT token, which itself tracks the spot price of traditional gold.
After a blistering rally that nearly reached $5,600 in late January this year, spot gold (XAUUSD+) has been confined to sub-$5k levels over the past month; currently failing to act as the geopolitical safe-haven we would expect from the precious metal.
READ MORE:
published Apr 1st: In March 2026, gold posted its biggest monthly drop since 2008 (global financial crisis) and fell into "bear market"
published Mar 20th: Here's why Gold and Silver sank to 6-week low, despite Middle East conflict.
Nonetheless, the launch of Bybit’s XAUT options contracts at the beginning of April provides us with a new way of understanding how Bybit traders are positioning themselves for future movements in gold’s spot price, as well as forward looking market sentiment.
Additionally, it provides us with an opportunity to compare how that positioning contrasts with that of gold traders on traditional options venues.
One-month contracts on Bybit initially traded at a lower implied volatility when compared to traditional market venues.
However, that changed following the April 7 ceasefire announcement.
Following the confirmation of a two-week ceasefire, forward looking expectations for volatility on traditional venues dropped sharply across the curve and have remained at those lower levels, while implied volatility on Bybit contracts has remained sticky above 30%.
We can also compare differences in skew between the two venues.
As President Trump confirmed the two-week ceasefire on April 7, TradFi gold traders in 30-day options contracts priced out much of the bearish premium towards put options.
However, despite the ceasefire and subsequent signs of further peace talks, they have not been willing, just yet, to flip bullish on the precious metal.
That contrasts what we saw on Bybit’s XAUT options.
Between April 7-8: skew briefly flipped bullish (from puts to calls) as an immediate reaction to the ceasefire
On April 12: skew then shifted defensive as traders dramatically bid up put options on Bybit after Trump announced the US blockade of the Strait of Hormuz.
Therefore, since their launch just over two weeks ago, positioning in Bybit’s XAUT options has at times contrasted that on traditional venues:
Bybit's XAUT options traders are still bracing for big price swings in gold, unlike TradFi gold options which are expecting less volatility ahead, as the US and Iran work towards a longer-term peace plan
Bybit's XAUT options traders appear more sensitive to Iran war headlines, with skew reacting more strongly (in both directions) to changing geopolitical developments compared to TradFi venues.
The question now is ...
Who's misreading the market: Bybit gold options traders? Or their counterparts on tradfi venues?
Time will tell.