The U.S. Securities and Exchange Commission (SEC) has given the green light for the listing and trading of options related to BlackRock's spot bitcoin exchange-traded fund (ETF) on the Nasdaq. In a notice released on Friday, the regulator confirmed the approval of options trading for BlackRock's iShares Bitcoin Trust, with the ticker symbol 'IBIT'.
These index options, which are listed derivatives that provide a swift and cost-effective method to increase exposure to bitcoin, will offer institutional investors and traders a new avenue to manage their risk associated with the world's most prominent cryptocurrency. The approval of options linked to a bitcoin ETF marks another significant milestone for the cryptocurrency sector, which was once viewed as an emerging asset class.
Since the introduction of bitcoin ETFs earlier this year, cryptocurrency has edged closer to mainstream recognition. Options grant holders the privilege to purchase or sell an asset, such as a stock or exchange-traded product, at a predetermined price by a specified date. Exchanges initiated the application process for spot bitcoin ETF options as soon as it became evident that the SEC would approve the underlying ETFs in January.
The SEC is responsible for overseeing the technical rule adjustments that exchanges must implement to list options. Additionally, the regulator stated that its current surveillance protocols will be applicable to IBIT options.
