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The U.S. Securities and Exchange Commission (SEC) has approved options trading for BlackRock’s iShares Bitcoin Trust (IBIT), giving investors a new method for managing risk associated with Bitcoin’s price. These options, which will be physically settled, function like other ETF options and adhere to strict regulatory oversight with added Bitcoin-specific surveillance.
To mitigate market manipulation, the SEC has set conservative position and exercise limits of 25,000 contracts. Enhanced anti-manipulation measures, such as real-time pattern tracking and post-trade surveillance, are also in place. This approval follows a proposal filed in January 2024 by Nasdaq ISE, which aimed to list and trade options on BlackRock’s Spot Bitcoin ETF.
The SEC’s decision marks a major milestone for institutional investors, offering new hedging tools as the integration of crypto products into traditional financial markets continues to grow. With Bitcoin’s increasing acceptance, the move enhances opportunities for risk management in a regulated environment.
