The CBOE has withdrawn its initial application for Bitcoin ETF options but quickly resubmitted a revised and more detailed version. The new filing, which is 44 pages long compared to the original 15-page document, includes additional information on position limits and market manipulation concerns. This suggests the SEC might have given feedback, prompting the more thorough application.
Bitcoin ETF Options Could Be Approved by Q4
While it’s not confirmed whether the SEC is actively discussing the updated filing with the CBOE, Bloomberg ETF analyst James Seyffart hinted that the resubmission might be a tactic to extend the decision deadline, potentially pushing it to late April 2025. Despite this, analysts are hopeful that Bitcoin ETF options could be approved by the end of this year.
The SEC’s final decision is expected around September 21, but options trading will also need approval from the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC) before it can begin.
In January, the NYSE American, CBOE, and Nasdaq all applied to offer options trading on spot Bitcoin ETFs. However, the SEC delayed its decision on the CBOE’s application in March and on the NYSE American’s application in April.
The recent CBOE resubmission suggests ongoing negotiations and adjustments as the industry waits for regulatory approval.
Options Trading Could Bring New Strategies
On August 9, Nate Geraci, president of ETF Store, pointed out that options are already available for some cryptocurrency derivatives ETPs, making a strong case for their introduction on spot ETFs. Options give traders the right, but not the obligation, to buy or sell a contract at a set price by a certain date.
If approved, options on spot Bitcoin ETFs could allow for new investment strategies, such as “covered call writing.” This involves selling a call option while holding the underlying asset through the spot ETF, allowing investors to earn regular income from the option premium while managing risks.
NYSE Seeks to List Ether ETF Options
In a related development, the NYSE American has proposed a rule change to list and trade options for three Ether ETFs managed by Grayscale and Bitwise. The proposed options include the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Mini (ETH). The NYSE American believes that adding options trading for these Ether ETFs would provide investors with a cost-effective way to gain more exposure to Ether.
The SEC will accept comments on this proposal for the next 21 days. If approved, this rule change would apply specifically to the Grayscale and Bitwise Ether ETFs, which are the only spot Ether funds listed on the NYSE American exchange.