Bitcoin’s recent surge to two-month highs has sparked a surge in demand for options contracts, leading to heightened activity in the options market.

The rally, which pushed the cryptocurrency’s price to $30,800, has been fueled by institutional interest and the influx of spot bitcoin ETF applications from major players like BlackRock, WisdomTree, and Invesco.

Traders are now turning to options to capitalize on the upward momentum after a temporary dip below a critical support level last week.

On Wednesday, the options market witnessed a remarkable $3.3 billion worth of bitcoin options contracts being traded across major exchanges, with Deribit dominating the global volume with over 80% market share.

This single-day notional volume represents the highest level in three months and indicates a strong appetite for call options, which grant the right to buy the underlying asset at a predetermined price in the future.

Market participants have shown significant interest in buying call options, particularly at strike prices of $30,000, $31,000, $32,000, and $40,000.

These call options enable traders to make leveraged bullish bets on bitcoin’s price. In the past week, call spreads have accounted for 45% of total block flows, which are large orders executed on over-the-counter liquidity networks like Paradigm before being listed on exchanges.

The price rally has prompted call overwriters, who sell calls against their owned cryptocurrency, to repurchase their bullish exposure.

Call overwriting is a popular strategy for generating additional yield in a flat-to-negative market. With the rapid upward move in bitcoin’s price, option overwriters have been buying back the topside positions, according to Patrick Chu, director of institutional sales and trading at Paradigm.