NYSE Arca and NYSE American eliminate restrictions on crypto ETF options, impacting major funds from BlackRock and Fidelity.
Two New York Stock Exchange-affiliated exchanges, NYSE Arca and NYSE American, have removed the 25,000 contract position limit on options tied to 11 Bitcoin and Ether exchange-traded funds. The changes were filed in the Federal Register on March 10 and approved by the Securities and Exchange Commission on Sunday, waiving the standard 30-day waiting period.
Details of the Rule Changes
The approved rule changes eliminate position limits and price discovery restrictions for options linked to these crypto ETFs. This adjustment aligns the treatment of crypto ETF options more closely with other commodity ETF options, potentially increasing liquidity and trading flexibility for institutions.
As part of the updates, institutions can now trade these crypto ETFs as FLEX options. FLEX options allow customizable terms, including non-standard strike prices, expiration dates, and exercise styles, which were not previously available under the limits imposed in November 2024.
The 11 affected ETFs include BlackRock’s iShares Bitcoin Trust, Fidelity's Wise Origin Bitcoin Fund, and ARK 21Shares Bitcoin ETF. Other impacted funds are from Bitwise and Grayscale, with the SEC noting these specific listings on NYSE Arca and NYSE American.
In a related development, the SEC had previously approved removing the 25,000-contract limit for Grayscale’s Bitcoin Trust ETF in late July. Meanwhile, Nasdaq International Securities Exchange is proposing to raise the limit for BlackRock’s IBIT to 1 million contracts, though that change remains under review as of a February notice from the SEC.
These adjustments reflect ongoing regulatory shifts in the crypto market, with the removals aimed at preventing market manipulation and volatility, as initially stated when the limits were set. CoinTelegraph reported these details based on SEC filings and exchange announcements.
