SEC Greenlights BlackRock ETF Options with Position Caps Amid Volatility Concerns

Nasdaq to List Bitcoin Options Linked to BlackRock ETF After SEC Clearance

A regulation modification that permits Nasdaq’s International Securities Exchange to list and trade options on BlackRock’s widely traded exchange-traded fund, the iShares Bitcoin Trust (IBIT), has been authorized by the U.S. Securities and Exchange Commission. Extending the selection of derivative products associated with Bitcoin has given investors more options to control their exposure to the biggest cryptocurrency in the world.

Since at least March of this year, when the SEC approved several Bitcoin-linked exchange-traded funds (ETFs) in the United States, BlackRock has been requesting clearance for such a listing. After Nasdaq ISE made a number of changes to address concerns about market manipulation and excessive risk-taking in the emerging cryptocurrency options market, the SEC approved the changes.

SEC Sets 25,000 Contract Limit on BlackRock’s Bitcoin ETF Options Amid Derivatives Concerns

SEC filing documents reveal that a significant revision places position and exercise restrictions for options on IBIT at 25,000 contracts. IBIT options will include American-style exercise and physical settlement, providing investors with a hedge against Bitcoin-related risk.

Since its inception earlier this year, BlackRock‘s ETF has drawn much interest from institutional and retail investors alike, tracking the price of Bitcoin and emerging as one of the most liquid Bitcoin-related products on the American market. Notwithstanding the clearance, the SEC’s action is a response to persistent worries about the possible dangers of cryptocurrency derivatives. Concerns about increased market volatility and the spread of cryptocurrency into conventional financial markets were raised in comment letters that were filed throughout the review process.

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