Grayscale and Bitwise Bitcoin ETFs Get Options Rule Tweaks
Published Date: 5/23/2025
Notice
Summary
NYSE Arca wants to change the rules for trading options on two popular Bitcoin ETFs: the Grayscale Bitcoin Mini Trust and the Bitwise Bitcoin ETF. They’re proposing to allow more flexible trading options and adjust limits on how many options traders can hold or exercise. The SEC is now reviewing these changes and deciding if they’ll approve them, which could impact how investors trade these Bitcoin-related options soon.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 1 costs, 1 mixed.
Limits Raised from 25,000 to 250,000
If you trade options on the Grayscale Bitcoin Mini Trust (ticker: BTC) or the Bitwise Bitcoin ETF (ticker: BITB), NYSE Arca proposes removing the 25,000-contract position and exercise limit and applying a 250,000 same-side contract limit per Fund under Rule 6.8-O, Commentary .06(e)(i). Position and exercise limits would be reviewed every six months.
FLEX Options Allowed; Positions Aggregated
NYSE Arca proposes to permit FLEX (customizable) equity options on BTC and BITB and requires that any FLEX and non-FLEX positions in the same Fund be aggregated when calculating position and exercise limits. FLEX positions would count toward the same 250,000-contract limit.
Position Reporting Rules Stay the Same
If you or your firm hold options on BTC or BITB, NYSE Arca will keep existing reporting requirements: members must report options positions and whether positions are hedged and describe hedges, and the customer large-position reporting threshold remains at 200 option contracts. Market Makers remain exempt from the member reporting requirement, though the Exchange may access Market Maker position information.
SEC Review and Decision Timeline
The Securities and Exchange Commission has instituted proceedings under Section 19(b)(2)(B) to decide whether to approve or disapprove the Exchange's proposed rule change, and the Commission designated May 25, 2025 as the date by which it shall approve, disapprove, or institute proceedings to determine whether to disapprove the proposal.
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