US SEC Approves Options Product on BlackRock’s Bitcoin Spot ETF

The US Securities and Exchange Commission has approved options trading on BlackRock’s iShare Bitcoin exchange-traded fund (ETF).

Per a September 20 approval, the SEC has given Nasdaq the nudge to list and trade the options contract for BlackRock’s Bitcoin trust following approvals from other involved regulators. Options contracts provide investors with a new means of exposure to Bitcoin, allowing them to buy or sell the asset at a price of choice.

SEC Sanctions Options Trading

Following the rule change approval, the iShares Bitcoin Trust options will list and trade on the exchange operator Nasdaq under the ticker IBIT. The SEC filing stated that the options contract under the ticker will be physically settled using the American-style exercise.

Nasdaq noted it would list and trade the IBIT options contract in a manner similar to that of other options ETFs. The exchange will add support for the product following approval from other involved parties.

The options contract will enhance the growing institutional traction of Bitcoin. With a new means of exposure, investors would cue in to harness the volatility associated with the largest cryptocurrency by market cap.

Notably, BlackRock and Nasdaq filed for the SEC’s approval of the options product on January 9, a day before the regulatory watchdog approved all 11 Bitcoin spot ETFs. The SEC published the rule change filing for comments 16 days later.

However, the securities regulator delayed the decision on the options product on July 19, stating it needed more time to approve or deny the rule change. Eventually, the SEC quit playing hardball with the Friday approval.

SEC’s Approval Not the Only Requirements

Tandem with the SEC’s rule change approval, Bloomberg’s Senior Analyst Eric Balchunas asserted that it was the first step before listing. The analyst stated that the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC) would have to sanction the product before listing.

Notably, unlike the SEC, the OCC and CFTC do not have a timeline for approval. Hence, the time the duo would endorse the options product, which is necessary for listing, remains unknown.

However, Balchunas expressed optimism, tapping the SEC for “coming around.” He also noted that he expects the OCC and CFTC approval in a short time. It bears mentioning that the SEC still has the Ethereum version of the options product and a Bitcoin options index to approve.