SEC Greenlights Bitcoin Options Trading on Cboe
Published Date: 4/3/2025
Notice
Summary
Cboe Exchange wants to start listing and trading options on the VanEck Bitcoin Trust, a new way for investors to bet on Bitcoin’s price. This change updates some trading rules and could open fresh opportunities for traders starting soon. If you’re into options or crypto, this could mean more ways to invest and possibly make money.
Analyzed Economic Effects
5 provisions identified: 3 benefits, 2 costs, 0 mixed.
Options Will Be Listed on VanEck Bitcoin Trust
You may be able to buy and sell exchange-listed options tied to the VanEck Bitcoin Trust because Cboe proposes to allow listing and trading of options on that ETF. As of March 5, 2025 the VanEck Bitcoin Trust had 49,900,000 shares outstanding and 32,469 beneficial holders (1/31/25), and the Exchange proposes to treat the Trust like other Units eligible for options trading.
25,000-Contract Position and Exercise Limit
The Exchange proposes a position limit of 25,000 same-side option contracts for VanEck Bitcoin Trust options, and the exercise limit will be equivalent to that position limit. If all 25,000 contracts were exercised, they would represent 2,500,000 VanEck Bitcoin Trust shares, about 5.01% of the 49,900,000 shares outstanding (as of March 5, 2025).
FLEX Options Excluded for This Trust
The Exchange proposes to amend Rule 4.20 to exclude the VanEck Bitcoin Trust from eligibility for FLEX (flexible-design) option trading, meaning FLEX option contracts would not be authorized for this ETF. The exclusion is part of the proposed rule change filed with the Commission.
Contract Specs: Exercise, Expirations, Strikes, Increments
Options on the VanEck Bitcoin Trust will be physically settled with American-style exercise. The Exchange will open at least one monthly expiration at start and may list weekly, monthly, quarterly, and LEAPS that expire from 12 to 180 months. Strike intervals will be $1 for strikes at $200 or less and $5 for strikes above $200; minimum trading increments are $0.05 when option price is under $3.00 and $0.10 at $3.00 or higher (and penny-interval rules may apply if eligible).
Surveillance and Regulatory Oversight Applied
Cboe will apply its existing options market surveillance procedures to VanEck Bitcoin Trust options, will have access to surveillances conducted by Cboe BZX, and will rely on Intermarket Surveillance Group (ISG) information sharing and a FINRA Regulatory Services Agreement under a 17d-2 plan. These measures are described as tools to detect and deter manipulative trading.
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