CBOE resubmits a detailed 44-page proposal for Bitcoin ETF options after SEC feedback.
The final SEC decision on Bitcoin ETF options is due by Sept 21, with further steps from OCC & CFTC.
Bitcoin ETF options could enhance strategies like covered call writing for income & risk management.
The Chicago Board Options Exchange (CBOE) withdrew its proposal to list options on spot Bitcoin ETFs but soon resubmitted a more complete version. According to industry commentators, this procedural change positively indicates continued interaction with the SEC.
The new application follows feedback from the SEC and includes comprehensive details addressing concerns such as position limits and market manipulation. This step reflects CBOE's commitment to meeting regulatory requirements and advancing the availability of Bitcoin ETF options.
Industry Analysts Respond to Developments
According to a post by Bloomberg ETF analyst James Seyffart, longer submissions indicated regulatory worries. James Seyffart reports that three exchanges have withdrawn their requests to market Bitcoin ETF options on the site, but well-known exchanges like Nasdaq and the NYSE remain on the list. The Chicago Board Options Exchange (CBOE) withdrew its application but has submitted a revised and fresh one.However, whether this adjustment will result in faster clearance or more delays is questionable.
https://twitter.com/JSeyff/status/1821627790065799634
According to Bloomberg experts, the fourth quarter of this year is when Bitcoin ETF options are expected to be released, he said. The SEC judgment is due in full by September 21st, “but more action from the CFTC [Commodity Futures Trading Commission] and OCC [Office of the Comptroller of the Currency] is required after that,” he stated.
Additionally, Seyffart noted that the original 15-page report had been replaced by an extended 44-page submission, which he saw as an indication that the SEC was taking the issue seriously.
Regulatory Progress and Market Reactions
Introducing Bitcoin ETF options has been under scrutiny since major exchanges, including NYSE American, CBOE, and Nasdaq filed the first applications in January. The SEC has extended its decision period several times, with the latest applications showing a more strategic approach by the CBOE in addressing the complexities involved in cryptocurrency derivatives.
The market has reacted to these developments with keen interest, as introducing options could enhance investment strategies such as covered call writing. This technique allows investors to generate income through premiums while mitigating risk by owning the underlying asset.
As the crypto industry continues to evolve, the potential approval of Bitcoin ETF options is critical for institutional and retail investors. The ability to hedge against downside risks and define exposures in Bitcoin investments could attract more participants, including traditional hedge funds and financial institutions.
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