SEC Unlocks Options Trading on Ethereum Trusts and ETFs
Published Date: 4/17/2025
Notice
Summary
MIAX Sapphire is updating its rules to let people trade options on three popular Ethereum-related funds: the Grayscale Ethereum Trust, the Grayscale Ethereum Mini Trust, and the Bitwise Ethereum ETF. This change means investors can now have more ways to trade and manage their crypto investments through options starting right away. If you’re into crypto or options trading, this opens up fresh opportunities with no delay!
Analyzed Economic Effects
6 provisions identified: 5 benefits, 1 costs, 0 mixed.
Options Now Permitted on Three Ether Funds
MIAX Sapphire filed a rule change on April 11, 2025 to allow listing and trading of options on the Grayscale Ethereum Trust (ETHE), the Grayscale Ethereum Mini Trust (ETH), and the Bitwise Ethereum ETF (ETHW). Options may be listed immediately under the rule change, but the Exchange states options will not be available for trading until The Options Clearing Corporation (OCC) represents it can fully clear and settle those options.
Position and Exercise Limits Set at 25,000
The Exchange proposes position and exercise limits for options on each Ether Fund of 25,000 contracts on the same side of the market pursuant to proposed Interpretations and Policies to MIAX Rules 307 and 309.
Shift from OTC to Listed Options Expected
The Exchange expects some investors who previously used the unregulated OTC options market for crypto-related options may prefer trading listed Ether Fund options for benefits such as enhanced efficiency in opening/closing positions, increased market transparency, and heightened counterparty creditworthiness because the OCC is issuer and guarantor of listed options.
Option Contract Terms and Strike/Increments
Options on the Ether Funds will be physically settled American-style and may list weekly, monthly, or quarterly expirations; LEAPS may expire from 12 to 39 months. Strike intervals will be $1 (for strikes $200 or less) and $5 (for strikes over $200), with potential participation in $0.50, $1, and $2.50 strike programs. Minimum trading increments will be $0.05 when a series price is below $3.00 and $0.10 at $3.00 or higher (with a penny program possible).
Clearing, Surveillance and Market Safeguards
The Exchange says it will apply existing exchange surveillance, ISG/CME information-sharing, and FINRA regulatory arrangements to Ether Fund options and will implement any new surveillance procedures it deems necessary to deter manipulation. Quotation and last sale information will be available via OPRA and major data vendors.
Customer Disclosure and Broker Suitability Rules
Applicable exchange rules will require that customers receive appropriate disclosure before trading options in the Ether Funds and that brokers opening accounts and recommending options transactions comply with customer suitability standards (MIAX Rules 1307 and 1309).
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