Fidelity's Ethereum Fund Now Bets Big with Options Trading
Published Date: 4/15/2025
Notice
Summary
Cboe Exchange just got the green light to let folks trade options on shares of the Fidelity Ethereum Fund, along with several other Ethereum ETFs and trusts. This means investors can now bet on or protect their Ethereum-related investments more easily, starting right away. It’s a big win for anyone interested in crypto options trading, opening new doors in the market with faster approval and fresh opportunities.
Analyzed Economic Effects
5 provisions identified: 4 benefits, 1 costs, 0 mixed.
Options Approved on Fidelity Ethereum Fund
The SEC granted accelerated approval on April 9, 2025 for Cboe Exchange to list and trade options on shares of the Fidelity Ethereum Fund. This approval lets investors trade listed options on the Fidelity Fund on Cboe using the Exchange's rules and infrastructure.
25,000-Contract Position and Exercise Limit
Cboe adopted a position limit of 25,000 same-side option contracts for the Fidelity Fund, and the exercise limit is equivalent to this 25,000-contract limit. The Exchange says 25,000 contracts would be equivalent to 2,500,000 Fidelity Fund shares and about 6.0% of the Fund's 41,700,000 outstanding shares (data as of December 23, 2024).
FLEX Options Excluded for Fidelity Fund
The Exchange will not authorize FLEX (customizable) options on shares of the Fidelity Ethereum Fund and amended Rule 4.20 to exclude the Fidelity Fund from FLEX eligibility. Standard listed option series (non-FLEX) may be listed instead.
Contract Terms: Settlement, Strikes, Expirations
Options on the Fidelity Fund will be physically settled, American-style exercise contracts. Cboe may list weekly, monthly, or quarterly expirations and LEAPS that expire 12 to 180 months from listing. Strike intervals will be $1 for strikes at $200 or below and $5 for strikes above $200; minimum price increments will be $0.05 for option prices under $3.00 and $0.10 for prices $3.00 or higher (with penny programs noted where applicable).
Surveillance and Market Data Protections
Cboe will apply its existing surveillance program to Fidelity Fund options, will have access to surveillances conducted by its affiliate BZX, participate in the Intermarket Surveillance Group (ISG), and make options data available via OPRA and market data vendors. Cboe also has a Regulatory Services Agreement with FINRA for certain surveillance functions.
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