The U.S. Securities and Exchange Commission (SEC) has approved BlackRock's application to trade options on its spot Bitcoin ETF, known as the iShares Bitcoin Trust (IBIT). This decision marks a significant step forward for the integration of Bitcoin into traditional financial instruments.
Key Points:
Physically Settled Options: The approved options will be physically settled, meaning that when they are exercised, Bitcoin will be delivered.
Flexibility for Traders: The options are American-style, allowing them to be exercised at any time before the expiration date, providing greater flexibility for traders.
SEC Support: The SEC noted that this move will enable investors to hedge their positions in Bitcoin and utilize the options market to manage risks associated with cryptocurrency volatility.
Monitoring and Security: Mechanisms will be implemented to monitor the market to prevent manipulation and ensure orderly trading.