BOX Exchange Opens Options Trading on Fidelity's Ethereum Fund
Published Date: 4/17/2025
Notice
Summary
BOX Exchange wants to let people trade options on the Fidelity Ethereum Fund, a new way to invest in Ethereum through options. They’re updating their rules to make this happen, affecting traders and investors who like crypto and options. This change could open fresh chances to trade starting soon, with no extra costs announced yet.
Analyzed Economic Effects
5 provisions identified: 2 benefits, 2 costs, 1 mixed.
BOX to List Options on Fidelity Ethereum Fund
BOX Exchange filed to amend Rules 3120, 5020, and 5055 to permit the listing and trading of options on the Fidelity Ethereum Fund, a trust whose shares principally consist of Ethereum. The filing would allow BOX to open options series on that Fund and apply the Exchange's existing ETF/ETP options rules to those contracts.
25,000 Contract Position and Exercise Cap
The Exchange proposes an initial position limit and corresponding exercise limit of 25,000 same-side option contracts for the Fidelity Ethereum Fund option. The Exchange notes that exercise limits are determined per Rule 3140 and therefore would also be 25,000 contracts.
Fidelity Fund Excluded From FLEX Options
The proposed rule amends Rule 5055 to exclude the Fidelity Ethereum Fund from the provision that would allow BOX to authorize FLEX equity option trading for that class, meaning FLEX Equity Options would not be available on the Fidelity Fund under this filing.
Contract Terms: Settlement, Strikes, Expirations
Options on the Fidelity Fund would be physically settled with American-style exercise. BOX may open weekly, monthly, or quarterly expirations and may list LEAPS that expire from 12 to 180 months. Strike intervals will be $1 for strikes $200 or less and $5 for strikes over $200; minimum quoting increments will be $0.05 for series priced under $3.00 and $0.10 for series priced $3.00 or higher (with potential participation in penny interval programs as applicable).
Listed Options Offered as OTC Alternative; Surveillance Safeguards
BOX states that listing Fidelity Fund options provides an exchange-listed alternative to OTC options, offering benefits such as enhanced efficiency, greater market transparency, and OCC-backed counterparty guarantee. The Exchange also describes surveillance arrangements (ISG, CME information sharing, and FINRA/17d-2 plans) it will use to monitor trading and deter manipulation.
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