Nasdaq, Cboe Seek to Offer Bitcoin ETF Options Trading

American stock exchange Nasdaq and the largest options exchange in the United States, Cboe, seek to provide investors access to the trading of options of spot Bitcoin exchange-traded funds (ETF) that were recently approved in the country. 

Interestingly, the Securities and Exchange Commission (SEC) has acknowledged the applications of the two exchanges to begin trading Bitcoin ETF options in the US. 

Nasdaq and Cboe Move Forward

Nasdaq filed an application with the SEC asking the regulator to allow it to list and trade the BlackRock iShares Bitcoin Trust, which was recently approved by the SEC, along with applications from other leading asset management firms like Fidelity and Bitwise. 

Further, Cboe also submitted an application, asking the agency to trade options on “ETPs [exchange-traded products] that Hold Bitcoin.” It is important to note that Cboe debuted six of the ten Bitcoin ETFs approved by the SEC.

A Good Inflow of Money

The spot Bitcoin ETFs started trading on Nasdaq and Cboe on January 11 after receiving greenlight from the SEC on January 10.

Cboe executive vice president Catherine Clay noted that the funds were seeing “good inflow” of capital in an interview with CNBC while adding that the ETFs were tracking the price of BTC “as expected.”

‘Next Logical Step’ from Nasdaq and Cboe

Clay called options “the next logical step on the [BTC] ETFs,” while adding that the move would add utility and risk mitigation to the spot Bitcoin ETFs. 

On the other hand, Nasdaq said in the filing that options would offer “cost efficiencies and increased hedging strategies.” As reported earlier, Nasdaq has also shown interest in offering crypto custody services.

Pending Approval

Clay confirmed that Cboe filed for permission to list options “last week,” while adding:

“We’re really in this holding pattern to see what the regulators will do with our filing and other exchanges’ filings as well. […] It’s really difficult to know if we will even see approval.”

The SEC has already acknowledged the 19b-4's requesting the ability to trade options on spot #Bitcoin ETFs. This is faster than SEC typically moves. Options could be approved before end of February if SEC wants to move fast?…

AT ABSOLUTE EARLIEST options still ~27+ days away pic.twitter.com/ohbvHgP2uO

— James Seyffart (@JSeyff) January 19, 2024

Bloomberg analyst James Seyffart commented on the speedy decision on the part of Nasdaq and Cboe, noting that options trading approval could come before the end of February and by around September.