U.S. SEC Greenlights Listing and Trading of Spot Bitcoin ETF Options on NYSE and Cboe

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As a seasoned crypto investor with a knack for navigating the ever-evolving digital asset landscape, I must admit that the recent SEC approvals for Bitcoin ETF options trading by both NYSE American LLC and Cboe Exchange, Inc., have piqued my interest. My personal journey in this space began when I mined my first Bitcoin back in 2011, so I’ve seen the ups and downs of this market firsthand.

On October 18th, the United States Securities and Exchange Commission (SEC) granted approval for two important applications. As a result, it’s now possible for options on Bitcoin Spot Exchange-Traded Funds (ETFs) to be listed and traded, with both NYSE American LLC and Cboe Exchange, Inc. being the authorized platforms.

The New York Stock Exchange’s (NYSE) subsidiary, NYSE American LLC, primarily serves smaller companies. Originally called the American Stock Exchange (AMEX), it now offers trading in equities, options, and Exchange-Traded Products (ETPs). This platform is particularly beneficial for businesses that don’t meet the criteria for listing on the larger NYSE exchange. Known for its emphasis on options trading across various assets like stocks and ETFs, it has recently broadened its scope to include spot Bitcoin ETFs, following regulatory approval in January.

Cboe Exchange, Inc., formerly known as the Chicago Board Options Exchange (CBOE), is recognized as one of the world’s leading and distinguished options trading platforms. Specializing in derivatives trading, it has gained a reputation for its groundbreaking contributions to the options market. The exchange operates in numerous international markets, providing not only options trading but also equity trading across several connected exchanges.

According to memos published by the SEC on Friday, it is now permitted for the NYSE to deal with and trade options for three different cryptocurrency trusts: the Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust (BTC), and Bitwise Bitcoin ETF (BITB). Additionally, Cboe Exchange has been granted approval to facilitate options trading for two other Bitcoin funds: Fidelity Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB).

In their rule change proposals, both exchanges reminded the Commission that on September 20, it had approved a rule change proposal by Nasdaq ISE, LLC to allow the listing and trading of options on another spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT).

In simpler terms, Options refer to investment tools that give you the chance to either purchase or sell Bitcoin ETFs at a set price within a defined period. Some experts in the financial world believe that offering options on Bitcoin ETFs could attract more institutional investors towards the crypto market and increase market liquidity as well.

The Securities and Exchange Commission (SEC) has given its approval for the NYSE, highlighting that options on Bitcoin Exchange-Traded Funds (ETFs) can enhance hedging strategies, boost liquidity, increase price precision, and lessen volatility in the underlying funds. Moreover, the SEC anticipates this move will foster greater market transparency and efficiency not only for Bitcoin ETFs but also for related financial products as well.

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2024-10-21 08:54