CBOE Resubmits Application for Bitcoin ETF Options as Approval Looms

The Chicago Board Options Exchange (CBOE) has resubmitted a more comprehensive application for options on spot Bitcoin ETFs after withdrawing its initial proposal. This new 44-page filing replaces the original 15-page document, providing more detailed information on position limits and market manipulation concerns.

Market Movement and SEC Feedback

Following the resubmission, Bloomberg ETF analyst James Seyffart commented on X that there is “definitely some movement on Bitcoin ETF options.” The enhanced application suggests that the SEC may have provided feedback, prompting the CBOE to address specific regulatory concerns.

Potential Approval Timeline

While it’s unclear if the SEC is actively engaging with the CBOE, Seyffart speculated that this move could “restart the clock,” possibly extending the decision deadline to late April 2025. Despite this, Bloomberg analysts remain optimistic about the approval of Bitcoin ETF options by the fourth quarter of this year.

The SEC’s final decision deadline is around September 21. However, approvals from the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC) will also be required before options trading can commence.

Ongoing Applications and Delays

In January, the NYSE American, CBOE, and Nasdaq all filed applications to introduce options trading on spot Bitcoin ETFs. The SEC delayed its decision on CBOE’s application in March and similarly deferred its decision on the NYSE American’s application in April. The recent resubmission by the CBOE indicates continued negotiations and adjustments as the industry awaits regulatory approval.

Nate Geraci’s Observations

Nate Geraci, president of ETF Store, noted that options are already available on some cryptocurrency derivatives exchange-traded products (ETPs). This makes a strong case for their availability on spot ETFs as well. Unlike spot and futures contracts, options give traders the right, but not the obligation, to buy or sell at a predetermined price by a specified date.

Investment Strategies with Bitcoin ETF Options

If approved, options based on spot Bitcoin ETFs could enable new investment strategies, such as “covered call writing.” This strategy involves selling a call option, granting another party the right to purchase the underlying asset at a specific strike price. Investors can generate regular income from the option premium while limiting risks, as they still own the asset via the spot ETF.

NYSE Proposes Options for Ether ETFs

Recently, the New York Stock Exchange (NYSE) American proposed a rule change to list and trade options for three Ether ETFs managed by Grayscale and Bitwise. The ETFs include the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Mini (ETH). The SEC is expected to receive comments on this proposal within the next 21 days. If approved, the rule change would apply specifically to these Ether ETFs, currently listed on the NYSE American exchange.