Bitcoin Spot ETF Options Could Start Trading as Early as Tomorrow

Many believe that offering options trading could attract more institutional interest in a Bitcoin ETF.

Options trading on Bitcoin ETFs — a long-awaited instrument that market participants believe will attract more institutional interest in cryptocurrencies — could be available as early as tomorrow, November 20, according to Nasdaq.

“Our goal at Nasdaq is to list and trade these options as early as tomorrow,” Alison Hennessy, director of ETP listings at Nasdaq, told Bloomberg TV. “I think it would be very exciting for investors to have these options listed on IBIT because that’s really what we’ve heard from them.”

While there are currently 11 US-based Bitcoin spot ETFs on the market, only one of them, BlackRock ’s iShares Bitcoin Trust (IBIT) , is listed on Nasdaq and therefore able to offer options.

Options are a form of derivative that allows an investor to buy or sell an underlying asset — in this case, IBIT — at a predetermined price within a certain period of time. They are particularly attractive to traders because they allow them to not only make leveraged directional bets but also hedge other positions.

The SEC approved IBIT’s options listing in September. The SEC also approved rule changes filed by the New York Stock Exchange (NYSE) and Cboe Global Markets to list several other Bitcoin spot ETFs.

As for other Bitcoin ETFs, options on these funds could also begin trading in the coming days, said James Seyffart, ETF analyst at Bloomberg Intelligence.

“It is likely that these will start trading this week, possibly within the next day or two,” he said. “As far as we know, all the regulatory and administrative hurdles have been cleared.”

It is widely believed that options trading could help attract more institutions into the cryptocurrency market. It remains to be seen how the leverage and hedges associated with options will affect price action.