2025-00531NoticeWallet

Wall Street Wants to Make Bitcoin Trading Even More Complicated

Published Date: 1/14/2025

Notice

Summary

Nasdaq PHLX wants to let traders use FLEX options for the iShares Bitcoin Trust ETF, which means more flexible ways to trade bitcoin-related options. This change affects investors who trade these options and could open up new strategies starting soon after approval. It’s a big step for bitcoin ETFs, making trading smoother and more customizable without immediate cost changes.

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

FLEX Options Permitted on IBIT

Nasdaq PHLX proposes to permit FLEX Equity Options on the iShares Bitcoin Trust ETF (IBIT) as both cash-settled and physically settled contracts. The Exchange filed the proposal on December 26, 2024; the SEC published notice on January 14, 2025 and will consider it within the regulatory review period.

25,000-Contract Aggregated Limit

The Exchange proposes to aggregate position and exercise limits for all IBIT options (FLEX and non-FLEX) at 25,000 contracts. If all those options were exercised, that aggregation would cap possible receipt of IBIT shares at 2,500,000 shares.

Exchange Trading Lowers Counterparty Risk

The Exchange says offering FLEX IBIT options on-exchange would let some OTC traders migrate to an exchange-traded product that is guaranteed by The Options Clearing Corporation (OCC), which reduces counterparty credit risk and can improve liquidity and price transparency compared with OTC FLEX contracts.

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Key Dates

Published Date
1/14/2025

Department and Agencies

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