Spot Bitcoin ETF Options Could Start Trading as Early as Tomorrow

Options trading on spot bitcoin exchange-traded funds (ETFs) — a long-awaited tool that market participants believe will lure more institutional interest to crypto — could become available as soon as Tuesday, according to Nasdaq.

“Our intent at Nasdaq is to list and trade these options as early as tomorrow,” Alison Hennessy, head of ETP listings at Nasdaq, told Bloomberg TV. “Getting these options listed on IBIT into the market I think will be very exciting for investors because that’s really what we have heard from them.”

While there are currently eleven U.S.-based spot bitcoin ETFs on the market, only one of them, BlackRock’s iShares Bitcoin Trust (IBIT), is listed on Nasdaq and could therefore have options available.

Options are a form of derivative that allow investors to purchase or sell an underlying asset —IBIT in this case — at a predetermined price within a specified period. They are particularly attractive to traders because they allow them to not just make leveraged directional bets, but to hedge other positions.

The SEC approved the listing of options for IBIT in September. It also approved the rule changes filed by the New York Stock Exchange (NYSE) and Cboe Global Markets, which list some of the other spot bitcoin ETFs.

As for the other bitcoin ETFs, options on those could start trading within the next few days as well, said James Seyffart, ETF analyst at Bloomberg Intelligence.

“It’s likely that these things start trading this week, potentially within the next day or two” he said. “As far as we can tell, all of the regulatory and bureaucratic hurdles have been cleared. It’s just a matter of crossing t’s and dotting i’s.”

It’s generally assumed that options trading could help to further draw institutions to the crypto market. It remains to be seen how the leverage and hedging associated with options will affect price action.