Nasdaq is seeking formal approval to offer and trade options based on a specific Bitcoin index, the exchange operator announced Tuesday.

A Reuters report indicates that the U.S. Securities and Exchange Commission (SEC) has yet to approve options tied to individual exchange-traded funds (ETFs) that track current Bitcoin prices. This includes Nasdaq’s application to offer options on BlackRock’s $21.3 billion iShares Bitcoin Trust ETF.

The proposed index options are intended to provide institutional investors and traders with a direct and cost-effective way to invest in or hedge against price movements in Bitcoin, the cryptocurrency with the highest market capitalization.

Options are contracts that give the owner the right to buy or sell an asset, such as a stock or exchange-traded fund, at a predetermined price on or before a certain date. They provide traders with a cost-effective strategy to amplify their investment positions, while institutional investors often use them to reduce financial risk.

The Bitcoin index options Nasdaq is planning to offer will be derived from the real-time CME CF Bitcoin Index, Reuters reports. This index reflects the value of Bitcoin futures and Bitcoin options that are traded on the exchange.$BTC