Nasdaq Eyes Options Trading on Crypto Index ETF
Published Date: 6/4/2025
Notice
Summary
Nasdaq ISE wants to start trading options on the Hashdex Nasdaq Crypto Index US ETF, known as NCIQ. This means investors can now buy and sell options tied to this crypto-focused ETF, opening new ways to invest and manage risk. The change is under review, so keep an eye out for when it goes live and how it might impact your trading game!
Analyzed Economic Effects
6 provisions identified: 4 benefits, 1 costs, 1 mixed.
Proposed Options Listing on NCIQ
On May 15, 2025 Nasdaq ISE filed a proposed rule change to list and trade options on the Hashdex Nasdaq Crypto Index US ETF (trading symbol NCIQ). NCIQ (an ETF that began trading February 14, 2025) would become an underlying security for options if the SEC approves the proposal.
Position & Exercise Limits Set
The Exchange proposes a position and exercise limit of 25,000 contracts for options on NCIQ. The filing notes NCIQ had $103,716,000 in assets under management on May 2, 2025 and an April average daily volume of 15,358 shares when assessing the limit.
ETF Provides Spot BTC and ETH Exposure
The Hashdex Nasdaq Crypto Index US ETF (NCIQ) holds only spot bitcoin and spot ether to track the Nasdaq Crypto US Settlement Price Index (NCIUSS), and is designed to offer investors exposure to bitcoin and ether through the public securities market rather than by holding crypto directly. The filing notes custodians (e.g., Coinbase Custody and BitGo) will hold the crypto and that the Trust commenced trading February 14, 2025.
Options Contract Terms and Pricing Rules
If listed, options on NCIQ would be physically settled American-style contracts and subject to ISE strike price intervals and minimum increments: strike intervals of $1 for strikes $200 or less and $5 for strikes above $200; option minimum increments of $0.05 when the option price is below $3.00 and $0.10 when the price is $3.00 or higher. The Exchange may list weekly, quarterly, short-term series, and LEAPS that expire 12 to 39 months after listing.
FLEX Options Not Permitted Now
The Exchange proposes to specify that options on NCIQ are not eligible for FLEX trading at this time by amending Options 3A, Section 3(a). The Exchange may later submit a separate filing to permit FLEX options on the Trust.
Surveillance and Market Integrity Measures
ISE intends to apply its existing real-time and post-trade surveillance programs to options on NCIQ and will have access to Nasdaq surveillance and Intermarket Surveillance Group (ISG) information. The filing references surveillance-sharing with the CME and FINRA responsibilities under a 17d-2 plan.
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