Is it a lottery ticket on ether's (ETH) mooning? Or just a small part of a super-sophisticated trade?

A pair of wildly speculative options trades this week on the over-the-counter institutional cryptocurrency trading network Paradigm has analysts’ tongues wagging. If the option "bet" is correct, the profit can be huge if ether's price rises.

According to the tape, on March 14 two block trades crossed for a total of 1,644 call options contracts on ether, with a strike price of $25,000 and an expiration date of Dec. 31. In plain English, that means the buyer of the options stands to reap a massive profit if ether’s price jumps by a four-digit percentage by the end of this year. The Paradigm trades were booked on Deribit, the world’s biggest crypto-options exchange.

The trades, which came at a total estimated cost of about $82,200, have such farfetched odds that Skew, one of the top suppliers of data on the crypto options market, doesn’t even calculate them for a strike price that high. According to the firm’s charts, the odds of ending this year at a mere $2,500 are roughly one in five.

Read more: Trading Hall of Fame: The Bitcoin Options Bet That Made $58.2M Profit on Just $638K

However, if the position is held open till expiry and the cryptocurrency settles below $25,000 on Dec. 31, the buyer gets nothing, the premium for nought.

Buying these deeply out-of-the-money call options is akin to purchasing lottery tickets. The maximum loss is limited to the premium paid. But profits can be huge relative to the cost. 

In December, CoinDesk reported on an options trader in the bitcoin market who made millions by buying several thousand contracts with a $36,000 strike price. At the time the trades were initially placed in October, the cryptocurrency was trading near $15,000. 

Paradigm, an institutional-grade communications platform, automates price negotiation and settlement workflows for OTC digital asset traders.

"Two counterparties, who have opposing interests can find each other and trade. All price agreement is via a bilateral request for quote process embedded within the Paradigm platform," Paradigm's co-founder, Anand Gomes, told CoinDesk.

Paradigm doesn’t comment on trade flows, so it’s not clear what was on the mind of the trader, or traders, who bought the deeply out-of-the-money options contract.

One possibility is the expectation the second-largest cryptocurrency will rise above $25,000 by the end of the year. 

Another possibility is the investor is just betting ether’s price will push ever higher in the coming months, making that $25,000 strike price seem, well, not so farfetched. If that happened, the person could probably sell the options contract in the market, likely for a profit. 

"The buyer could be betting that the probability of ether rising above $25,000 by the end of December will go much higher than its current level, rather than betting on ETH actually crossing above that level," Samneet Chepal, quantitative analyst at the quantitative and systematic digital asset investment firm Ledger Prime, told CoinDesk. 

Then there’s the question of the options contract seller’s motive. The risk calculus is very different: While an options buyer gets massive potential upside with very small odds at the cost of the premium paid, the seller gets a guaranteed payout – that premium – but with a massive potential loss on the overall trade. 

Also read: Ethereum Co-Founder: 'Right Now, I Don't Think There Is an Ethereum Killer Out There'

It's hard to imagine a sophisticated trader would sell a naked position in large quantities on these deep OTM calls," Chepal told CoinDesk. "Although a trader would collect premium from selling the calls, these far-out-of-the-money options have the potential for significant mark-to-market losses, especially if there's a change in sentiment.”

The seller could be another institution selling the far-out-of-the-money call against a long position in the spot market or a market maker – an individual or a company ensuring that the market runs smoothly by enabling traders to buy and sell options even if there are no public orders to match the required trade.