1 week ago
Nasdaq filed to rise the existent options declaration bounds of the iShares Bitcoin Trust ETF (IBIT) from 25,000 to 250,000 contracts, representing an exercisable hazard of 2.89%, according to a Jan. 6 SEC filing.
According to the filing, the existent bounds represents lone 0.4% of exercisable hazard for the spot Bitcoin (BTC) exchange-traded money (ETF). Jeffrey Park, caput of alpha strategies astatine Bitwise, had previously stated that this is simply a debased number.
A declaration bounds caps the fig of contracts that tin beryllium held connected the aforesaid broadside of the market. Since it varies by ETF based connected the fig of outstanding shares and trading volume, Nasdaq’s request cited measurement maturation arsenic a imaginable operator of the SEC’s approval.
According to the document:
“The Exchange besides has nary crushed to judge that the maturation successful trading measurement successful IBIT volition not continue. Rather, the Exchange expects continued options measurement maturation successful IBIT arsenic opportunities for investors to enactment successful the options markets summation and evolve.”
Park said helium is optimistic that the exertion volition person a affirmative outcome. He added that the facts person ever been connected Nasdaq and BlackRock’s side.
Treated differently
According to analysts, the support of options trading successful spot Bitcoin ETFs was an important improvement for crypto adoption arsenic it attracts much blase traders and consequently adds much liquidity to the market.
IBIT’s options debut moved implicit $446 million successful its archetypal trading hours, which Bloomberg elder ETF expert Eric Balchunas highlighted arsenic remarkable, calling it “a ton” for a motorboat day.
However, contempt the approval, Park stated that crypto inactive receives peculiar attraction for trading, comparing IBIT’s declaration bounds with accepted concern vehicles.
He cited CME Bitcoin futures contracts’ 2,000-contract limit, equivalent to 175,000 contracts for IBIT.
Moreover, contempt requiring a rise to a 250,000-contract limit, Park believes IBIT qualifies for 400,000 options contracts, equivalent to 7% of outstanding shares arsenic of Nov. 19, 2024.
A debased headdress for options contracts creates “unusual marketplace dynamics,” specified arsenic arbitrage betwixt spot Bitcoin ETF shares.
The station Nasdaq proposes raising IBIT options declaration bounds for traders appeared archetypal connected CryptoSlate.
English (US) 