# What Is the Impact of a Lock-up Expiration on the Asset's Price? ▴ Learn

**Published:** 2025-11-17
**Categories:** Learn

---

## What Is the Impact of a Lock-up Expiration on the Asset’s Price?

A lock-up expiration often leads to a temporary, downward pressure on the asset's price. This is because a large volume of previously restricted shares or tokens becomes available for sale, and some insiders may choose to take profits.

The actual impact depends on market sentiment and the proportion of the circulating supply being unlocked.

Distinguish between ‘Trading Volume’ and ‘Liquidity Depth’

Does High Trading Volume Always Guarantee a Tight Bid-Offer Spread?

How Can a Large Market Order Affect the Bid-Offer Spread Itself?

How Have Some Exchanges Responded to Regulatory Pressure on Privacy Coins?

## Discover More

- 
### [What Is the Typical Token Lock-up Period Following an IDO?](https://crypto.greeks.live/learn/what-is-the-typical-token-lock-up-period-following-an-ido/)
![A high contrast studio capture displays a beige, glossy semi-sphere hinged against a translucent cyan sphere bisected by a hairline fracture, resting atop a matte, darker blue substrate. This composition symbolizes the opaque nature of vesting schedules or locked liquidity pools common in DeFi yield farming strategies. The exposed hinge mechanism suggests a complex smart contract execution, perhaps representing the unlocking of a governance token or the realization of embedded options payoff structures. The blue sphere embodies underlying asset price discovery amidst market microstructure noise. Concepts like collateralized debt positions and contingent claim settlement are evoked by the revealed separation. The visual tension mirrors high-frequency trading stress testing option Greeks sensitivity across derivative exposure.](https://crypto.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Protocol-Governance-Token-Unlocking-Mechanism-Revealing-Underlying-Asset-Volatility-Surface.jpg)

A period, often 6 months to several years, restricting the sale of tokens by the team and early investors to ensure price stability.

- 
### [How Can a Time-Lock Function Mitigate the Risk of a Malicious Contract Deployment?](https://crypto.greeks.live/learn/how-can-a-time-lock-function-mitigate-the-risk-of-a-malicious-contract-deployment/)
![A high-contrast, macro view centers on a lens aperture exhibiting concentric teal reflections against a dark metallic housing suggesting precision instrumentation. This visual schema abstracts the narrowing focus required for effective options arbitrage within high-frequency decentralized finance DeFi environments. The surrounding black and stark white quadrant shapes imply directional market bias or potential bifurcation in liquidity pools necessitating stringent risk management protocols. Keywords include Impermanent Loss hedging Gamma scalping Automated Market Maker AMM structures Strike Price execution precision and Liquidity Provider LP mechanisms navigating fluctuating blockchain ledger latency. This image embodies the critical moment of execution or option settlement within volatile digital asset pairings.](https://crypto.greeks.live/wp-content/uploads/2025/10/Visualization-of-Digital-Asset-Volatility-Aperture-in-Decentralized-Exchange-Order-Flow-Analysis.jpg)

It delays critical administrative changes, providing a review window for the community to detect and cancel a potentially malicious upgrade or deployment.

- 
### [What Is the Role of a “Time-Lock” in Mitigating Smart Contract Risks?](https://crypto.greeks.live/learn/what-is-the-role-of-a-time-lock-in-mitigating-smart-contract-risks/)
![This visual schema represents a complex multi-axis financial instrument potentially modeling decentralized autonomous organization governance tokens navigating extreme market flux. The central circular disc suggests a core liquidity pool or centralized exchange order book structure, overlaid by sharp, elongated structures resembling spread arbitrage configurations or dynamic synthetic asset profiles. The pale, intersecting vanes may symbolize intrinsic value components within American style options or layered perpetual futures contracts adjusting to exogenous shock events. This structure evokes strategies around dynamic delta hedging against unpredictable spot price action and managing gamma exposure in low-cap asset derivatives markets, emphasizing counterparty risk mitigation via algorithmic execution protocols. These elements abstractly map to high-frequency trading strategies involving exotic payoff functions and volatility surface mapping for digital asset collateralization.](https://crypto.greeks.live/wp-content/uploads/2025/10/Cryptocurrency-Volatility-Skew-Hedging-Mechanism-Depicting-Exotic-Option-Payoff-Structures.jpg)

It forces a delay between proposing and executing critical contract changes, allowing for community review and intervention.

- 
### [Why Does an ITM Option Have a Higher Premium Compared to an OTM Option with the Same Expiration?](https://crypto.greeks.live/learn/why-does-an-itm-option-have-a-higher-premium-compared-to-an-otm-option-with-the-same-expiration/)
![This stark rendering depicts an angular crystalline structure set against absolute blackness, illuminated subtly from below by an ethereal cyan glow, suggesting deep-sea or void mechanics. The sharp, overlapping planes, pocked with small depressions, abstractly represent the convergence of non-linear payoffs within complex financial instruments. It visualizes the structural integrity and inherent risk skew in synthetic asset replication. The central nexus implies an execution hub for granular delta hedging strategies applied to perpetual swaps and exotic options contracts on decentralized exchanges DEX liquidity pools. Surface imperfections suggest latent counterparty risk and imperfect stochastic modeling underlying implied volatility calculations for Bitcoin options pricing under high-frequency market microstructure scenarios. This form encapsulates arbitrage opportunities born from structural misalignment between spot exposure and derivative contract valuations.](https://crypto.greeks.live/wp-content/uploads/2025/10/Asymmetric-Volatility-Surface-Contraction-Sculpting-Cryptographic-Digital-Asset-Hedging-Mechanisms.jpg)

ITM premium includes intrinsic value; OTM premium only includes time value.

- 
### [How Does MTM Reduce the Potential for a Massive Loss on the Expiration Date?](https://crypto.greeks.live/learn/how-does-mtm-reduce-the-potential-for-a-massive-loss-on-the-expiration-date/)
![A massive, pale spherical body dominates the background suggesting a stable asset underpinning immense market capitalization. Two intersecting, elongated white structures form a cross-axis, analogous to calibrated futures contract expiration dates intersecting at a specific spot price benchmark. The deep space backdrop implies the low-latency environment of cross-chain asset settlement. This composition visually models the intersection of an underlying spot asset like Bitcoin or Ethereum with complex financial engineering such as calculating implied volatility premiums or designing bespoke synthetic assets leveraging smart contract collateralization for perpetual swaps hedging. Observe the subtle teal luminescence beneath the horizontal crossbar representing optimized liquidity provision across AMMs. The dark sphere floating above suggests potential systemic risk or an exogenous market shock event demanding immediate delta hedging via options contracts, specifically near-the-money put valuations versus current open interest.](https://crypto.greeks.live/wp-content/uploads/2025/10/Stochastic-Volatility-Surface-Mapping-Across-Decentralized-Exchange-Hedging-Mechanisms.jpg)

By forcing daily settlement of losses, MTM prevents the total loss from accumulating to an unmanageable size by the contract's expiration date.

- 
### [What Is a Common Lock-up Period for a Project’s Core Team Tokens?](https://crypto.greeks.live/learn/what-is-a-common-lock-up-period-for-a-projects-core-team-tokens/)
![This highly detailed macro visualization captures a composite mechanical joint exhibiting complex structural articulation suggesting controlled leverage or option contract unwinding. The pale beige and deep cyan components interface via dark metallic bushings illuminated by internal electric blue luminescence hinting at secure settlement protocols or secure ledger commitment. Spherical nodes interact with finely machined linkages mimicking the precise execution flow for exotic derivatives pricing models like Bermudan swaptions or contingent claim settlements within decentralized finance infrastructure. The visual metaphor underscores the exactitude required in managing collateralized debt positions or navigating complex smart contract logic across volatile digital asset landscapes. This structure represents robust execution fidelity underpinning over-the-counter swaps.](https://crypto.greeks.live/wp-content/uploads/2025/10/Modular-Articulation-Point-Visualizing-Cryptocurrency-Derivatives-Execution-Mechanism-Precision.jpg)

Typically 1-2 years lock-up, followed by a 1-3 year gradual vesting schedule to ensure long-term commitment.

- 
### [How Does a Sharp Drop in Implied Volatility Affect Gamma near Expiration?](https://crypto.greeks.live/learn/how-does-a-sharp-drop-in-implied-volatility-affect-gamma-near-expiration/)
![Two sharp, angular crystalline structures, separated by a narrow aperture revealing a metallic securing element, dominate the dark frame. These geometric forms, refracting internal teal and pale gold light against a stark black background, conceptually model the discrete outcomes of high-frequency trading strategies. The separation signifies divergence in derivative pricing models like implied volatility surfaces applied to perpetual swaps or futures contracts. This visual partition embodies market fragmentation and the inherent risk asymmetry within decentralized exchange limit order books, illustrating the separation between bid ask spreads and the instantaneous settlement of on-chain leverage protocols. The polished surfaces reflect systemic risk propagation across different asset tranches, key to understanding complex DeFi collateral management and margin calls in volatile digital asset environments.](https://crypto.greeks.live/wp-content/uploads/2025/10/Bifurcated-Glass-Prisms-Reflecting-Volatility-Skew-in-Decentralized-Finance-Mechanisms.jpg)

A drop in IV increases Gamma, especially for ATM options, by compressing the probability distribution and magnifying sensitivity.

- 
### [Why Do Options with a Longer Time to Expiration Typically Have a Higher Vega?](https://crypto.greeks.live/learn/why-do-options-with-a-longer-time-to-expiration-typically-have-a-higher-vega/)
![This high-contrast visualization features intersecting metallic needle analogues poised over smoothly contoured, dark cyan and beige substrates, reminiscent of complex financial instrument geometry. It symbolizes the precise juncture of options expiry where underlying asset value dictates settlement protocols. The stark black background accentuates the sharp convergence, mirroring the binary nature of derivative contract resolution. Key concepts visualized include implied volatility modeling for determining premium valuation, efficient market hypothesis challenges at rollover events, and the critical importance of timely delta hedging execution. The structure suggests the convergence onto a final settlement price akin to a specific strike price realization within decentralized finance perpetual futures markets. This abstraction addresses concepts like clearing mechanism finality and liquidation cascades in leveraged trading environments.](https://crypto.greeks.live/wp-content/uploads/2025/10/Conceptualized-Clock-Analogy-for-Cryptocurrency-Derivatives-Strike-Price-Execution-Mechanisms.jpg)

More time for volatility to affect price; Greater potential for value change; Higher sensitivity over long term.

- 
### [How Does the ‘Strike Price’ Impact the Profitability of an Option Contract?](https://crypto.greeks.live/learn/how-does-the-strike-price-impact-the-profitability-of-an-option-contract/)
![This macro view captures a highly polished, teal-hued spherical element emerging from a stacked, dark, concentric structure suggesting a precise optical or mechanical interface. This visual configuration conceptually models the complex mechanics of decentralized finance DeFi structured products like exotic options where the smooth exterior represents the perception of liquidity while the internal glassy layers denote stochastic volatility modeling. The interplay of light on the lens-like apparatus suggests price discovery mechanisms within an Automated Market Maker AMM pool. Specifically, the structure evokes the nested security layers shielding underlying collateralized assets from sudden liquidation cascades or exposure to catastrophic risk events inherent in high-leverage perpetual swaps. Keywords emphasize the convergence of on-chain security architecture and derivative pricing theory including: Black Scholes Merton adjustments collateralized debt positions CDPs theta decay hedging mechanisms and synthetic asset issuance frameworks.](https://crypto.greeks.live/wp-content/uploads/2025/10/Microscopic-View-of-DeFi-Liquidity-Pool-Front-End-Module-Reflecting-Token-Implied-Volatility-Surface.jpg)

The strike price is the transaction price; a lower strike is better for Calls, and a higher strike is better for Puts for profit potential.

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