- BlackRock received the SEC's greenlight to list options on spot Bitcoin ETFs
- Bitcoin options trading on IBIT will follow BlackRock's standards.
- The OCC and CFTC has to give their approval before the options can go live.
According to a filing on Friday, the US Securities & Exchange Commission (SEC) approved BlackRock's 19-b4 application to list and trade options on the iShares Bitcoin Trust (IBIT).
BlackRock receives approval to trade options for spot Bitcoin ETFs
The SEC approved BlackRock's application to list and trade option contracts on its iShares Bitcoin Trust (IBIT). The approval was revealed in a filing released on Friday, allowing for physically settled options. This means that when a contract is exercised, it will result in the delivery of Bitcoin.
Options trading is a form of derivatives trading that offers investors the right, but not the obligation, to buy or sell an asset at a predetermined price and within a specific time frame.
BlackRock will treat IBIT options as American-styled options, allowing investors to exercise the contract any time before or on the expiration date. This style allows investors to easily react to market changes to maximize profits and avoid losses.
The SEC stated that the options on IBIT will provide investors with accurate risk management and "hedging" to gain exposure to Bitcoin's price and to Bitcoin-related products.
Options on IBIT will follow BlackRock's listing standards and remain guided by SEC rules.
"The Exchange's initial listing standards require, among other things, that the security underlying a listed option be 'characterized by a substantial number of outstanding shares that are widely held and actively traded," the filing stated.
BlackRock also proposed listing options contracts for its Ethereum Trust in August to expand its investment tools for Ethereum and make crypto investments more accessible to financial markets.
The SEC approved 11 spot Bitcoin ETFs in January but delayed approving options on the product until now.
Following the approval of BlackRock's request, crypto ETF experts anticipate the SEC will eventually extend the approval to other issuers.
"I'm assuming others will be approved in short order. Huge win for the bitcoin ETFs (as it will attract more liquidity which will in turn attract more big fish)," said Bloomberg analyst Eric Balchunas.
Balchunas also noted that the Office of the Comptroller of the Currency (OCC) and the Commodity & Futures Trading Commission (CFTC) must also give their approval before the options contract for IBIT can go live.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
IRS says crypto staking should be taxed in response to lawsuit
The IRS stated that rewards from cryptocurrency staking are taxable upon receipt, according to a Bloomberg report on Monday, which stated the agency rejected a legal argument that sought to delay taxation until such rewards are sold or exchanged.
Solana dominates Bitcoin, Ethereum in price performance and trading volume: Glassnode
Solana is up 6% on Monday following a Glassnode report indicating that SOL has seen more capital increase than Bitcoin and Ethereum. Despite the large gains suggesting a relatively heated market, SOL could still stretch its growth before establishing a top for the cycle.
Ethereum Price Forecast: ETH risks a decline to $3,000 as investors realize increased profits and losses
Ethereum is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days. If whales fail to maintain their recent buy-the-dip attitude, ETH risks a decline below $3,000.
Crypto Today: BTC hits new Trump-era low as Chainlink, HBAR and AAVE lead market recovery
The global cryptocurrency market cap shrank by $500 billion after the Federal Reserve's hawkish statements on December 17. Amid the market crash, Bitcoin price declined 7.2% last week, recording its first weekly timeframe loss since Donald Trump’s re-election.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.