MIAX Enables Commodity Options: Trade Gold Without Digging for It
Published Date: 3/19/2025
Notice
Summary
Miami International Securities Exchange (MIAX) wants to update its rules so traders can buy and sell options on Commodity-Based Trust Shares. This change opens up new trading opportunities for investors interested in commodities without owning the actual goods. The proposal is under review now, and if approved, it could start soon, giving the market fresh ways to invest and possibly impact trading activity.
Analyzed Economic Effects
5 provisions identified: 4 benefits, 0 costs, 1 mixed.
Options on Commodity-Based ETFs Allowed
MIAX proposes to amend Exchange Rule 402 to allow listing and trading of options on Commodity-Based Trust Shares (shares of a trust that hold a specified commodity, or a specified commodity plus cash, issued in a specified aggregate minimum and redeemable for the commodity and/or cash). If approved, options on any Commodity-Based Trust Share that meets the Exchange's initial listing criteria could trade on MIAX.
Standard Options Terms, Limits, Increments
Options on Commodity-Based Trust Shares would trade under the Exchange's existing ETF-options rules: expirations may include weekly, monthly, quarterly, and LEAPS (12–39 months); strike interval programs (e.g., $0.50, $1, $2.50 rules) apply; minimum quote increments are $0.05 when option price is less than $3.00 and $0.10 when $3.00 or higher; and position/exercise limits can be up to 250,000 contracts for the largest ETFs (with lower limits of 200,000, 75,000, 50,000, or 25,000 for smaller ETFs).
Faster Listings Without Separate SEC Approval
The Exchange proposes that, under Rule 19b-4(e), options on Commodity-Based Trust Shares that satisfy the Exchange's initial listing criteria could commence trading without a separate product-by-product SEC approval, potentially reducing the time and cost to bring such options to market.
Physical Settlement; American-Style Exercise
The Exchange states that options on Commodity-Based Trust Shares will be physically settled contracts with American-style exercise. That means option exercisers and writers will be subject to physical delivery procedures like other physically settled stock options.
Surveillance and Regulatory Safeguards Apply
MIAX states that options on Commodity-Based Trust Shares would be subject to the Exchange's existing surveillance procedures, membership in the Intermarket Surveillance Group (ISG), a regulatory services agreement with FINRA, and may include any additional surveillance procedures deemed necessary to monitor trading.
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