All Major U.S. Exchanges Have Now Removed Bitcoin and Ethereum ETF Options Caps

TLDR

• NYSE Arca and NYSE American removed the 25,000-contract position limit on options for 11 crypto ETFs
• The SEC waived the standard 30-day waiting period, making changes effective immediately
• Affected ETFs include BlackRock’s IBIT, Fidelity’s FBTC, ARK 21Shares, Grayscale, and Bitwise products
• Crypto ETF options can now be traded as FLEX options with customizable terms
• Every major U.S. options exchange has now completed this transition

NYSE Arca and NYSE American filed rule changes with the Securities and Exchange Commission to remove the 25,000-contract position limit on options tied to 11 Bitcoin and Ether ETFs. The SEC waived the standard 30-day waiting period, meaning the changes are effective immediately.

The 25,000-contract cap was put in place in November 2024 when crypto ETF options first began trading. It was designed as a precautionary measure to limit potential market manipulation and volatility.

The rule changes cover 11 crypto ETF products. These include BlackRock’s iShares Bitcoin Trust, Fidelity’s Wise Origin Bitcoin Fund, ARK 21Shares Bitcoin ETF, Grayscale’s Bitcoin and Ethereum trusts, and Bitwise’s Bitcoin and Ethereum ETFs.

The removal of the cap brings crypto ETF options in line with how other commodity ETF options are treated at major exchanges. Options on large, liquid ETFs can now qualify for position limits of 250,000 contracts or more under standard exchange frameworks.

The changes also allow these products to trade as FLEX options. FLEX options let traders customize contract terms, including non-standard strike prices, expiration dates, and exercise styles.

On IBIT’s first day of options trading in November 2024, Bloomberg senior ETF analyst Eric Balchunas noted the fund generated nearly $1.9 billion in notional exposure despite the contract cap being in place.

In October 2024, Kbit CEO Ed Tolson said the cap was not overly restrictive given the $40 billion in Bitcoin open interest across futures and perpetual swaps at the time. But the limit was seen as out of step with comparable commodity ETFs.

Industry-Wide Transition Now Complete

Multiple exchanges had already moved to remove the cap before NYSE. Nasdaq ISE and Nasdaq PHLX filed to lift restrictions in January. MIAX followed the same month. MEMX filed in February. Cboe filed its own version in March.

With NYSE Arca and NYSE American now completing their filings, every major U.S. options exchange has removed the cap.

The SEC noted the proposals do not introduce any new regulatory issues, pointing to the identical changes already in effect at other exchanges.

What This Means for Institutions

Removing the position cap allows institutions to run more efficient hedging strategies, basis trades, and overlay programs. Access to FLEX options means institutions can negotiate custom contract terms for structured products.

This flexibility was already available for comparable commodity ETFs like the SPDR Gold Trust and iShares Silver Trust, but had not been extended to crypto ETF options until now.

Separately, Nasdaq ISE has a pending proposal to raise the position limit specifically for BlackRock’s IBIT to 1 million contracts. The SEC is still reviewing that proposal, which is currently on its fifth amendment. The comment period for both NYSE filings closes April 13.

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