MIAX PEARL Unlocks Oil Options: Commodities Get Option Trading Boost
Published Date: 3/19/2025
Notice
Summary
MIAX PEARL wants to update its rules so traders can buy and sell options on Commodity-Based Trust Shares, which are special investment products tied to commodities like gold or oil. This change opens new trading opportunities for investors and could happen soon after the SEC reviews it. If approved, it means more ways to invest and possibly more market action on MIAX PEARL.
Analyzed Economic Effects
7 provisions identified: 5 benefits, 0 costs, 2 mixed.
Options on Commodity-Based Trust Shares
MIAX PEARL proposes to amend Exchange Rule 402 to allow the listing and trading of options whose underlying security is a Commodity-Based Trust Share (trust-issued shares backed by a specified commodity and/or cash). If approved, these options would be eligible to trade on MIAX PEARL under the Exchange's existing ETF-options listing criteria.
Varied Expirations and LEAPS Availability
MIAX says it may open at least one expiration month and may list weekly, monthly, quarterly series and long-term equity options (LEAPS) that expire from 12 to 39 months for options on Commodity-Based Trust Shares, consistent with Exchange Rules 404 and 406.
Faster, Lower-Cost Options Market Access for Issuers
The Exchange states the proposed rule change could reduce the time and costs for issuers and market participants to bring options on Commodity-Based Trust Shares to market because, if the underlying ETF meets the initial listing criteria, the Exchange could list options without separate Commission approval.
Physical Settlement, American-Style Exercise
The Exchange states that options on a Commodity-Based Trust Share would be physically settled contracts with American-style exercise. That means exercising holders would receive delivery (or other OCC-settlement obligations) rather than cash settlement, and options can be exercised at any time up to expiration.
Same Listing & Continued Standards Apply
Options on Commodity-Based Trust Shares would be subject to MIAX PEARL's existing initial listing criteria (Rule 402(a)/(i)) and continued-listing standards (Rule 403(g)), including delisting and halt conditions tied to the underlying ETF's listing status or availability of the underlying value.
Position Limits, Exercise Limits, and Margin Rules
The filing states that options on Commodity-Based Trust Shares will be governed by the Exchange's existing position and exercise limits (e.g., up to 250,000 contracts for the largest ETFs, with lower limits for smaller ETFs) and by MIAX margin requirements (MIAX Rule 1502).
Surveillance, Data, and Trade Transparency
The Exchange will apply its existing surveillance and reporting safeguards (including ISG membership and FINRA regulatory services) to these options; quotation and last-sale data for Commodity-Based Trust Shares will be available via the Consolidated Tape Association and options data via OPRA.
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Previous / Next Documents
Previous: 2025-04511 — Self-Regulatory Organizations; Notice of Filing of a Proposed Rule Change, as Modified by Partial Amendment No. 1, by Miami International Securities Exchange, LLC To Amend Exchange Rule 402, Criteria for Underlying Securities, To List and Trade Options on Commodity-Based Trust Shares
Miami International Securities Exchange (MIAX) wants to update its rules so traders can buy and sell options on Commodity-Based Trust Shares. This change opens up new trading opportunities for investors interested in commodities without owning the actual goods. The proposal is under review now, and if approved, it could start soon, giving the market fresh ways to invest and possibly impact trading activity.
Next: 2025-04513 — Self-Regulatory Organizations; Notice of Filing of a Proposed Rule Change, as Modified by Partial Amendment Nos. 1 and 2, by MIAX Sapphire, LLC To Amend Exchange Rule 402, Criteria for Underlying Securities, To List and Trade Options on Commodity-Based Trust Shares
MIAX Sapphire wants to update its rules so it can offer options trading on Commodity-Based Trust Shares, which are special investment products tied to commodities like gold or oil. This change affects investors who trade options and could open up new ways to invest starting soon after approval. The Exchange fixed some small errors in their proposal and is now asking for public feedback before moving forward.