Strike Price Clustering

Strike price clustering refers to the tendency for open interest in options to accumulate heavily at specific, round-number strike prices. This behavior is common in both traditional and crypto markets, as traders gravitate toward these psychological levels for their entry and exit points.

When large volumes of options are clustered at these levels, they create significant technical support or resistance. As the expiration date nears, the proximity of the underlying asset price to these clusters can dictate the intensity of hedging activity.

Market makers often pay close attention to these zones, as they represent areas where the potential for gamma-related price swings is highest. By monitoring these clusters, traders can anticipate potential volatility events and position themselves to take advantage of the expected price behavior.