NYSE Arca raises the question of listing options on commodity trusts, crypto ETFs
On August 13, 2009, New York Stock Exchange (NYSE) Arca Electronic Exchange abandoned a rule change it proposed in January to allow commodity-based trusts, including cryptocurrency exchange-traded funds (ETFs).
The purpose of the proposed change is to “permit the listing and trading of options on shares of a product-based trust,” according to a Jan. 19 filing. In the year According to a February 28 letter from Grayscale Investments to the United States Securities and Exchange Commission (SEC), it was adding options to crypto ETFs such as the Grayscale Bitcoin Trust (GBTC).
The SEC “must update its antiquated, historic patchwork approach to approving options on spot commodity-based ETPs…including options on exchange-traded GBTC,” the letter said.
The withdrawal is the latest in a flurry of activity related to listed options on crypto ETFs.
In the year On August 8, securities exchange Cboe updated its application to list options on BTC ETFs. According to an Aug. 6 filing, Nasdaq has asked the SEC for permission to list options on BlackRock's iShares Ethereum Trust (ETHA). Bloomberg predicts that BTC options will continue to rise in the fourth quarter.
“There is definitely some movement in Bitcoin ETF options,” Bloomberg Intelligence analyst James Seifert said in an August 8 blog post. “The SEC probably made some kind of comment.
Investors in the US are currently allowed to trade options that track the performance of BTC, but not ETFs that physically hold Bitcoin.
“[I]According to the Greyscale letter, while it is acceptable for investors to invest in stock options for commodity derivatives, investing in stock options for commodity derivatives should be the same.
Allowing options trading on crypto ETFs will be a milestone for adoption.
Financial advisers — who control about half of the investment flows in the $9 trillion ETF market — rely on options to hedge against sharp market moves. More than 10% of advisors will actively use options to manage client portfolios by 2023, according to a study by The Journal of Financial Planning.
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