SEC Eyes Ethereum ETFs: Crypto Options Hit the Trading Floor Soon
Published Date: 2/24/2025
Notice
Summary
Cboe Exchange is gearing up to let traders buy and sell options on three new Ethereum-related ETFs: the Grayscale Ethereum Trust ETF, the Grayscale Ethereum Mini Trust ETF, and the Bitwise Ethereum ETF. This change means more ways for investors to play in the crypto market starting soon, with potential new money moves and trading opportunities. The SEC is reviewing the plan and inviting public feedback before it goes live.
Analyzed Economic Effects
5 provisions identified: 2 benefits, 2 costs, 1 mixed.
Options Listed on Three Ethereum ETFs
Cboe proposes to list and trade options on three named Ethereum-backed ETFs: the Grayscale Ethereum Trust ETF, the Grayscale Ethereum Mini Trust ETF, and the Bitwise Ethereum ETF. That means you could buy and sell standardized options contracts tied to these three ETFs once the rule is approved.
Settlement, Expirations, and LEAPS Rules
Options on the Ethereum Funds will be physically settled American-style and the Exchange may open weekly, monthly, quarterly, and long-term LEAPS that expire from 12 to 180 months. At least one expiration month will be opened at commencement of trading for each ETF.
25,000-Contract Position Limit Set
The Exchange proposes a position and exercise limit of 25,000 same-side option contracts for each of the three Ethereum Fund options. If you trade options on these ETFs, no single account could hold more than 25,000 contracts on the same side at one time under this rule.
Ethereum ETFs Excluded From FLEX Options
The proposed rule amends Rule 4.20 to exclude the three Ethereum Funds from the Exchange's FLEX option provision, meaning FLEX-style customizable option contracts would not be authorized for these ETFs. Traders who use FLEX (customized) options would not be able to use that FLEX framework for these specific ETFs if the rule is adopted.
Strike Intervals and Minimum Price Increments
Strike price intervals for Ethereum Fund options will be $1 for strikes at $200 or below and $5 where the strike is over $200. Minimum quoting increments will be $0.05 when an option's price is below $3.00 and $0.10 when the price is $3.00 or higher (with potential participation in penny-increment programs that allow $0.01/$0.05 increments).
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Key Dates
Department and Agencies
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