Cboe BZX Widens Options Eligibility for Fund Shares Quietly
Published Date: 4/17/2025
Notice
Summary
Cboe BZX Exchange is updating its rules to allow more types of Fund Shares to be listed and traded as options. This change affects traders and investors by expanding the kinds of securities they can trade on the Exchange. The new rule takes effect immediately, aiming to boost trading opportunities without extra costs.
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
Options Allowed on Fidelity Ethereum Fund
On April 10, 2025, Cboe BZX filed a rule change to allow listing and trading of options on shares of the Fidelity Ethereum Fund (a trust whose assets consist principally of Ethereum). The Exchange says the Fund meets its listing criteria (e.g., 41,700,000 shares outstanding as of December 23, 2024 and 38,170 beneficial holders as of November 26, 2024) and will treat these Fund Shares the same as other Fund Share options.
25,000-Contract Position Limit Set
Options on the Fidelity Fund will have position and exercise limits of 25,000 same-side contracts. The Exchange says 25,000 contracts would equate to 2,500,000 underlying shares (about 6.0% of the 41,700,000 outstanding shares as of December 23, 2024) and a notional value of $85,925,000 using a $34.37 share price on December 23, 2024.
Contract Specs: Settlement, Expirations, Strikes
Fidelity Fund options will be physically settled with American-style exercise and will be listed with at least one monthly expiration at commencement; the Exchange may also list weekly, monthly, quarterly, or LEAPS that expire 12 to 39 months from listing. Strike intervals will be $1 or greater for strikes $200 or less and $5 or greater for strikes over $200; minimum quoting increments will be $0.05 for prices below $3.00 and $0.10 for prices $3.00 or higher (with penny-interval program rules applying where eligible).
Surveillance, Clearing, and Systems Capacity
The Exchange will apply its existing surveillance and clearing frameworks to Fidelity Fund options, including access to Intermarket Surveillance Group (ISG) information, a regulatory services agreement with FINRA, OCC clearing and OPRA market-data capacity. The Exchange says these measures, plus potential additional procedures, are designed to detect or deter manipulation and handle any added traffic from listing these options.
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