VERIFIEDBy Xavier Rivera· ·2 min read
SEC Approves Nasdaq Bitcoin Index Options on Phlx
The SEC approved Nasdaq’s proposal to list cash-settled, European-style Bitcoin index options on the Philadelphia Stock Exchange under ticker QBTC. The products provide an alternative to spot Bitcoin ETF options with no physical delivery or early assignment risk, but trading cannot begin until the CFTC grants exemptive relief.
Source:CoinTelegraph
TL;DRAI · 60 sec read
The Securities and Exchange Commission has approved Nasdaq’s proposal to list cash-settled Bitcoin index options on the Philadelphia Stock Exchange. The approval was granted on an accelerated basis and published Friday on the SEC’s website.
The options are European-style contracts tied to the Nasdaq Bitcoin Index, a benchmark that tracks one one-hundredth of the CME CF Bitcoin Real Time Index, which updates with data from major cryptocurrency exchanges every 200 milliseconds.
The new contracts are cash-settled, meaning holders receive the difference between the Bitcoin spot price and the strike price at expiration. Unlike options on spot Bitcoin ETFs, there is no physical Bitcoin involved and no risk of early assignment, offering traders an alternative way to bet on the price of the cryptocurrency.
The contracts will trade under the ticker QBTC on Phlx, with a minimum increment of $0.01 and a position limit of 24,000 contracts per side, equivalent to roughly 0.12% of Bitcoin’s outstanding supply, the SEC noted in its order.
Despite the SEC green light, the options cannot begin trading until the Commodity Futures Trading Commission grants its own exemptive relief due to Bitcoin’s classification as a commodity, which falls under the CFTC’s jurisdiction.
CME Group, which has offered Bitcoin futures options since 2020, filed a comment letter in October last year arguing the contracts fall under CFTC’s exclusive jurisdiction. In the filing, the SEC noted that Section 717 of the Dodd-Frank Act is not limited to “novel derivative products” and allows for concurrent jurisdiction between the SEC and CFTC when the latter grants exemptive relief.
“The concept of shared jurisdiction between the Commission and the CFTC is not new,” the SEC wrote in the filing, citing existing examples such as mixed swaps and security futures.
The SEC, under Chairman Paul Atkins, is moving toward a more crypto-friendly regulatory posture. Atkins has moved to drop several high-profile enforcement cases against crypto firms that were initiated under the previous administration, and has publicly called for clearer regulatory frameworks that encourage innovation rather than stifle it. The agency is preparing an “innovation exemption” that would allow blockchain-based tokenized trading of public company shares on decentralized crypto platforms, even without the consent of the companies being tracked.
The options are European-style contracts tied to the Nasdaq Bitcoin Index, a benchmark that tracks one one-hundredth of the CME CF Bitcoin Real Time Index, which updates with data from major cryptocurrency exchanges every 200 milliseconds.
The new contracts are cash-settled, meaning holders receive the difference between the Bitcoin spot price and the strike price at expiration. Unlike options on spot Bitcoin ETFs, there is no physical Bitcoin involved and no risk of early assignment, offering traders an alternative way to bet on the price of the cryptocurrency.
The contracts will trade under the ticker QBTC on Phlx, with a minimum increment of $0.01 and a position limit of 24,000 contracts per side, equivalent to roughly 0.12% of Bitcoin’s outstanding supply, the SEC noted in its order.
Despite the SEC green light, the options cannot begin trading until the Commodity Futures Trading Commission grants its own exemptive relief due to Bitcoin’s classification as a commodity, which falls under the CFTC’s jurisdiction.
CME Group, which has offered Bitcoin futures options since 2020, filed a comment letter in October last year arguing the contracts fall under CFTC’s exclusive jurisdiction. In the filing, the SEC noted that Section 717 of the Dodd-Frank Act is not limited to “novel derivative products” and allows for concurrent jurisdiction between the SEC and CFTC when the latter grants exemptive relief.
“The concept of shared jurisdiction between the Commission and the CFTC is not new,” the SEC wrote in the filing, citing existing examples such as mixed swaps and security futures.
The SEC, under Chairman Paul Atkins, is moving toward a more crypto-friendly regulatory posture. Atkins has moved to drop several high-profile enforcement cases against crypto firms that were initiated under the previous administration, and has publicly called for clearer regulatory frameworks that encourage innovation rather than stifle it. The agency is preparing an “innovation exemption” that would allow blockchain-based tokenized trading of public company shares on decentralized crypto platforms, even without the consent of the companies being tracked.
HELP US IMPROVE
Reader-supported
The Circuitry is a passion project I've always wanted to build, and I love the work behind it.
Running it costs real money. APIs, hosting, time. To keep improving the site and growing this into something useful for everyone, those costs have to be covered.
Any contribution is appreciated. If not, no pressure. Thanks for reading.