Markets moved higher ahead of Nvidia’s earnings update. The move came as trading conditions shifted back towards risk-taking.
The FTSE 100 continued its rise and was described as nearing 11,000. It first moved above 10,000 only weeks earlier.
Ftse 100 Valuation And Sector Support
The index was linked to a lower valuation than US markets and support from sectors such as mining, defence and banking. Pharmaceutical shares were also cited, alongside dividend payments.
Bitcoin rose 5% in its best day in about three weeks. Despite the gain, its late-January highs were still described as distant.
We recall the market’s enthusiasm in 2025 when the FTSE 100 first crossed 10,000, with many expecting a rapid climb to 11,000. While the index did touch that level later in the year, it has since settled back near 10,600. The recent January 2026 UK inflation report, which came in slightly higher than expected at 3.1%, has cooled some of that momentum for now.
This dip presents a potential entry for bullish traders who believe the FTSE’s valuation gap with the US is still the dominant theme. Implied volatility on the index has fallen to a 52-week low of around 14%, making options contracts relatively inexpensive. We see an opportunity in buying April 2026 call options with a strike price around 10,800 to position for a rebound.
Bitcoin Volatility And Options Strategies
The underlying strength from mining and banking sectors, seen as less vulnerable to the AI disruption that continues to drive volatility in US tech, remains a key factor. With the Nasdaq 100’s forward price-to-earnings ratio now exceeding 35, the FTSE 100’s ratio of 15 looks comparatively cheap. Selling out-of-the-money put options on major miners or banks could be a way to collect premium from this perceived stability.
Looking back, the 5% Bitcoin rally mentioned in 2025 was an early sign of a slow recovery that eventually pushed it to new highs later that year. Now, in early 2026, the asset has been consolidating, trading in a tight range around $85,000 for several weeks. Its 30-day realized volatility has compressed significantly, currently sitting near 45%, down from over 90% during parts of last year’s climb.
For derivative traders, this sideways action and lower volatility is a signal to sell options premium. Strategies that profit from a lack of movement, such as selling an iron condor or a strangle, are becoming more popular. We are seeing traders deploy March 2026 strangles, selling puts with a strike near $78,000 and calls with a strike near $92,000, betting that Bitcoin will remain range-bound in the coming weeks.
