Nasdaq ISE, LLC, the Nasdaq-owned options exchange, has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to significantly increase position and option exercise limits on BlackRock’s iShares Bitcoin Trust ETF (IBIT).
The proposal seeks to raise the current limit from 25,000 contracts to 250,000, citing increased trading volumes and liquidity in IBIT options as justification.
Nasdaq Pushes to Increase IBIT Options Limits:
In its filing, Nasdaq ISE cited IBIT’s rapid growth and institutional appeal. Specifically, it pointed to a market cap of $46.8 billion and average daily trading volume of 39.4 million shares. According to the exchange, these metrics reflect the need for higher trading limits to better meet demand from large investors.
The proposal borrows a leaf from the New York Stock Exchange (NYSE), which proposed extending trading hours for Bitcoin exchange-traded funds in October. As BeInCrypto reported, NYSE Arca cited increased demand.
For the Nasdaq ISE, the proposed increase would bring IBIT option limits in line with — or even lower than — similar ETFs. For example, SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) have higher position limits relative to their floating shares. The ISE noted that GLD’s position limit represents 8.17% of its floating shares, while SLV’s is at 4.8%.
In comparison, IBIT’s proposed limit of 250,000 contracts would represent just 2.89% of the ETF’s total shares. This conservative approach is reinforced by the ProShares Bitcoin Strategy ETF (BITO), whose position limits represent 23.22% of its floating shares.
Impact of Extending IBIT Options Trading Limits:
If approved, the new limits could significantly boost market liquidity. It would also provide institutional players with greater flexibility to hedge their Bitcoin positions.
“The exchange believes that increasing the position limits (and exercise) of IBIT options will lead to a more liquid and competitive market environment,” the ISE stated.
The SEC has 45 days to evaluate the proposal, after which it may approve, reject or initiate further proceedings. Meanwhile, since its approval four months ago, IBIT has steadily gained traction among institutional investors. On its first day of trading, BlackRock’s Bitcoin ETF options saw sales of more than $425 million, reflecting pent-up demand for regulated exposure to bitcoin.
The SEC’s green light for IBIT options trading last September was a pivotal moment, offering investors a regulated way to hedge against Bitcoin price volatility. The Nasdaq ISE’s latest proposal builds on that momentum, in line with broader industry efforts to integrate digital assets into traditional finance.
Nasdaq’s expansion of IBIT options trading is part of a broader strategy to increase its digital asset offerings. In August, it also sought to offer options trading on BlackRock’s Spot Ethereum ETF. The exchange also plans to seek approval to trade bitcoin options tied to the CME CF Bitcoin Real-Time Index. The move mirrors similar initiatives by the NYSE.
