Summary
Options for spot bitcoin ETFs could soon be available, providing an important hedging tool for institutional investors. The Cboe Options Exchange, NYSE Arca, and Nasdaq have all submitted proposals to list options on exchange-traded products (ETPs) that hold bitcoin. While Cboe intends to list these options as soon as regulatory approvals are received, the SEC is seeking comments on the proposals before making a decision. Options on spot bitcoin ETFs could be appealing to institutional investors for hedging downside risk and speculation, as well as providing financial advisers with a tool to protect against downside risk without taking taxable gains. The SEC is expected to approve options on spot bitcoin ETFs before summer.
Key Points
1. Options for spot bitcoin ETFs could soon be available, providing institutional investors with a tool to hedge risk.
2. ETF options saw a significant increase in average daily volumes in 2023, indicating a growing interest in these derivatives.
3. The Cboe Options Exchange, NYSE Arca, and Nasdaq have submitted proposals to list options on bitcoin ETPs, with Cboe expecting to list options later in 2024.