The US Securities and Exchange Commission (SEC) has invited public comments on the potential introduction of Bitcoin spot ETF options trading. This development has drawn much reaction from the financial market, with experts predicting that the regulatory body could grant approval as early as March.
NYSE Files For Bitwise, Grayscale’s Bitcoin Spot ETF Options
In a letter to the SEC on Friday, the New York Stock Exchange (NYSE) applied for a rule change that will permit options trading on Bitwise Bitcoin ETF (BITC), Grayscale Bitcoin Trust (GBTC), and “any trust that holds Bitcoin.” The NYSE stated that Bitcoin spot ETFs are qualified for options trading according to US trading laws as they are commodity-backed exchanged-traded products (ETP).
Earlier this month, Bitcoinist reported that Nasdaq submitted a similar proposal to the US securities watchdog seeking permission to list and trade options on BlackRock’s billion-dollar spot ETF IBIT.
For context, options are financial derivatives that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price (strike price) before or at the expiration date of the option. In this case, the Bitcoin spot ETF represents the underlying asset to which the introduction of options trading will be an advantageous “relatively lower cost investing tool” that will allow traders to gain exposure to these investment funds without direct engagement.
The NYSE has stated that all exchange standard rules and regulations will guide all aspects of listing and trading of the spot ETF options, including “listing criteria, expirations, exercise prices, minimum increments, position and exercise limits, margin requirements, customer accounts, and trading halt procedures.” In addition, the Bitcoin spot ETF options will also be subjected to NYSE’s continued listing standards and can be delisted if the underlying ETF fails to meet certain standards according to the US securities law, Rule 916, among many other conditions.
Analyst Forecasts Possible Early Approval For Bitcoin ETF Options Trading
As mentioned previously, the SEC has formally acknowledged the latest filing by NYSE, incorporating the proposal into its official register and inviting public feedback for the next 21 days. In response to this significant development, Bloomberg analyst James Seyffart has suggested that there may be an expedited consideration of this matter.
If that is the case, Seyffart predicts the US regulatory body could grant approval to Bitcoin spot ETF options trading in the next 27 days. In the worst-case scenario in which the SEC takes its time, the Bloomberg analyst believes an approval decision could come around September 21.
Featured image from Freepik, chart from TradingView
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