EDGX Joins Race to List Commodity-Based Options Quickly
Published Date: 3/19/2025
Notice
Summary
Cboe EDGX Exchange wants to let people trade options on Commodity-Based Trust Shares, which are special funds tied to commodities like gold or oil. This change affects investors and traders by giving them new ways to invest and trade starting soon after approval. It’s a smart move to keep up with other exchanges and could open fresh money-making chances.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 0 costs, 1 mixed.
New Options on Commodity Trust Shares
Cboe EDGX filed on March 5, 2025 to allow listing and trading of options on Commodity-Based Trust Shares (fund shares tied to commodities). If the SEC approves the filing (the notice was published March 19, 2025 and the SEC will act within 45 days or up to 90 days), investors who hold or trade commodity-trust ETFs that meet the Exchange's initial listing criteria could trade exchange-listed options on those shares.
Settlement, Exercise, and Expiration Features
Options on Commodity-Based Trust Shares will be physically settled contracts with American-style exercise. The Exchange will open at least one expiration month and one series at commencement and may list weekly, monthly, quarterly, and long-term series that expire from 12 to 39 months.
Strike Intervals, Minimum Increments, and Limits
Strike intervals for these options may be $1 or greater where the strike price is $200 or less and $5 or greater where the strike is over $200; the Exchange may list series under $1, $0.50, $2.50, and $5 strike programs. Minimum quoting increments will be $0.05 for option prices below $3.00 and $0.10 for prices $3.00 or higher (with penny-increment exceptions of $0.01 and $0.05 for eligible series). Position and exercise limits follow Cboe Options tiers, with the largest funds having limits of 250,000 contracts and smaller funds having limits of 200,000; 75,000; 50,000; or 25,000 contracts, as applicable.
Faster Listings Using Generic Standards
The Exchange proposes to treat Commodity-Based Trust Shares like other ETFs for options listing, allowing options on qualifying Commodity-Based Trust Shares to commence trading without separate SEC approval under Rule 19b-4(e). The notice was published March 19, 2025, and the SEC will act within 45 days of publication or up to 90 days, which the Exchange says could reduce time and costs for issuers and promote competition among options exchanges.
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Previous: 2025-04503, Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend Rule 19.3 To Permit the Listing of Options on Commodity-Based Trust Shares
Cboe BZX Exchange wants to let people trade options on Commodity-Based Trust Shares, which are like special funds tied to commodities. This change opens up new ways for investors to buy and sell these options starting soon, making the market more exciting and flexible. If approved, it could impact traders and fund managers by giving them fresh tools to manage their money.
Next: 2025-04505, Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To List and Trade Shares of the Franklin Solana ETF Under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares
Cboe BZX Exchange wants to start trading shares of the Franklin Solana ETF, a new fund tied to the Solana cryptocurrency, under their commodity-based trust rules. This move opens up fresh investment options for traders and investors interested in crypto assets. The proposal was filed on March 12, 2025, and is now open for public comments before it goes live.