Cboe launches cash-settled options on spot Bitcoin ETFs, simplifying access to Bitcoin price exposure.
New options offer European-style exercise, eliminating early assignment risks and easing risk management.
Mini Bitcoin ETF options provide flexibility, catering to traders with diverse portfolio sizes and strategies.
Cboe Global Markets (CBOE) has announced that it will introduce cash-settled options on spot Bitcoin ETFs on December 2. These options will be available exclusively on the Cboe Options Exchange. The product aims to offer traders exposure to Bitcoin’s price without requiring ownership of the cryptocurrency.
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The new options will use the Cboe Bitcoin U.S. ETF Index. This index tracks U.S.-listed spot Bitcoin ETFs and mirrors Bitcoin’s spot price. Developed by Cboe Labs and Cboe Global Indices, the index ensures accurate underlying data for the options.
Advantages of Cash-Settled Options
Cash-settled options simplify trading by closing positions in cash at expiration. This eliminates the need to deliver Bitcoin ETFs, reducing complexity.
Cboe will also launch Mini Bitcoin U.S. ETF Index options, offering flexibility with smaller contract sizes. Mini options are valued at one-tenth of standard options, making them accessible for diverse portfolio sizes. Traders can manage risk effectively and adjust position sizing as needed.
Supporting Institutional and Retail Traders
Rob Hocking, Cboe’s Global Head of Product Innovation, emphasized the benefits of these options. He highlighted their cash-settlement structure, diverse index sizes, and customization through FLEX options. He noted that these features appeal to both institutional and retail traders.
FLEX options enable contract terms tailored to individual needs. This customization allows traders to create strategies specific to their objectives. These features support precise risk management and enhanced trading strategies.
Expanding Crypto Derivatives Access
This launch broadens Cboe’s digital asset offerings. Adam Inzirillo, Global Head of Data and Access Solutions, stated that the initiative reflects the strength of Cboe’s platform. He highlighted the value it adds for customers seeking innovative trading solutions.
Cboe’s BZX Equities Exchange remains a key venue for U.S. spot crypto ETFs. The introduction of cash-settled options on spot Bitcoin ETFs strengthens its position in the crypto derivatives market. These options provide regulated access to Bitcoin’s price movements for investors.
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