Nasdaq is seeking approval for its plans to introduce and trade options based on a bitcoin index, the exchange operator announced Tuesday.
According to a Reuters report, the U.S. Securities and Exchange Commission (SEC) has yet to give the green light to options tied to individual exchange-traded funds (ETFs) that are tied to bitcoin spot prices, including Nasdaq’s own application to offer options on BlackRock’s $21.3 billion iShares Bitcoin Trust ETF.
These proposed index options would provide institutional investors and traders with a simplified and cost-effective method to gain or hedge exposure to bitcoin, the largest cryptocurrency by market value.
Options are financial instruments that allow the holder to buy or sell an asset, such as a stock or ETF, at a fixed price before a specific date. They offer traders a low-cost way to leverage their positions, while institutional investors often use them to mitigate risk.
Reuters explains that Nasdaq's proposed Bitcoin index options would be based on the CME CF Bitcoin Real-Time Index, which tracks Bitcoin futures and options traded on the CME Group's exchange, according to the company.
As the SEC continues to deliberate on options for new spot bitcoin ETFs, traders have been turning to alternative products, such as recently launched leveraged ETFs tied to bitcoin and their respective options.
Applications for spot bitcoin ETF options were filed as soon as the SEC indicated it would approve the underlying ETFs in January. However, according to Reuters, exchanges have since withdrawn and resubmitted these applications after receiving feedback from the SEC.
