The US Securities and Exchange Commission (SEC) commented on proposals regarding options trading on Bitcoin ETFs on January 19.
One SEC notice concerns a proposed rule change that would allow Nasdaq to list and trade options on BlackRock’s iShares Bitcoin Trust.
A second SEC notice concerns a proposed rule change that Cboe Exchange Inc. would allow you to list and trade options on various Bitcoin exchange-traded products (ETPs). While the text of the notice does not indicate which funds the proposal applies to, Cboe BZX is responsible for listing and trading most of the spot Bitcoin ETFs approved in January, including those from Ark Invest, VanEck, WisdomTree, Invesco, Fidelity, GlobalX, and Franklin Templeton.
Options trading would introduce new investment strategies for each fund. Specifically, this approach would allow investors to engage in leveraged trading, potentially achieving higher returns at a higher risk.
SEC could decide on approval in the coming months
Bloomberg ETF analyst James Seyffart commented on the development, noting:
“The SEC has already recognized that the 19b-4 calls for the ability to trade options on spot Bitcoin ETFs. This is faster than SEC typically moves. Options could be approved before the end of February if the SEC wants to act quickly?”
Seyffart’s other statements indicate that the SEC could not make a decision until around February 15 at the earliest or around September 21 at the latest.
Seyffart also noted that each proposal was posted on January 16, meaning the SEC published its final communications after three days. He said the latest developments are “significantly faster” than other 19b-4 rule change proposals, which reached a similar stage after more than a fortnight.
However, the text of each document indicates slightly earlier submission dates for each proposal. Nasdaq (on behalf of BlackRock) submitted its proposal on January 9 and submitted an amendment on January 11. Cboe submitted its proposal on January 5.
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