SEC Considers FLEX Options Proposal for BlackRock Bitcoin ETF (IBIT)

TLDR

• BOX Exchange has submitted a proposal to the SEC to introduce FLEX equity options on BlackRock’s Bitcoin ETF (IBIT).
• The SEC is currently reviewing this proposal along with similar filings from other exchanges.
• BOX Exchange aims to amend its Rule 5055 to allow the listing of FLEX options on IBIT.
• The SEC has not yet approved FLEX options on IBIT, except for cash-settled options.
• FLEX options on IBIT could help manage volatility and improve liquidity in BlackRock’s Bitcoin ETF.

BOX Exchange has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to list FLEX equity options on the BlackRock iShares Bitcoin ETF (IBIT). This filing, made on December 2, follows other exchanges such as Nasdaq PHLX and Nasdaq ISE. The SEC is now reviewing this request under its generic listing rules for submissions from multiple exchanges.

BOX Exchange’s proposal seeks to amend BOX Rule 5055 to introduce FLEX equity options on IBIT. The filing came after the government shutdown ended, and the exchange is eager to secure approval. This move aims to enable more flexible risk management for investors in BlackRock’s Bitcoin ETF.

Other exchanges, including Nasdaq PHLX and Nasdaq ISE, have submitted similar proposals for IBIT options. However, Nasdaq ISE was the first to receive approval to list options on IBIT. The SEC has approved IBIT options with increased position and exercise limits, but has yet to approve FLEX options.

FLEX Options on IBIT Could Manage Bitcoin ETF Volatility

BOX Exchange believes that introducing FLEX options on IBIT will help market participants better manage the volatility of BlackRock’s Bitcoin ETF. The exchange has emphasized that the new options would enhance liquidity and reduce counterparty credit risk. FLEX options are designed to offer customized contract terms that suit individual market needs.

“FLEX IBIT options would create a more competitive trading environment,” BOX Exchange stated in its filing. The exchange is also seeking to waive the SEC’s 30-day operative delay. BOX argues this would benefit investors and ensure fair competition between exchanges.

The SEC’s approval process for FLEX options has yet to reach a conclusion. Currently, only cash-settled options on IBIT are approved for trading. Investors are closely watching the SEC’s decision as the outcome could impact future trading strategies involving BlackRock’s Bitcoin ETF.

BlackRock’s Bitcoin ETF Under Growing Market Scrutiny

BlackRock’s iShares Bitcoin ETF continues to attract attention from both investors and regulators. The ETF, which tracks the spot price of Bitcoin, is part of BlackRock’s expanding portfolio of cryptocurrency-related offerings. The approval of FLEX options could open the door for new investment strategies linked to the Bitcoin ETF.

Meanwhile, BlackRock’s other cryptocurrency-focused offerings, including the iShares Bitcoin Premium Income ETF, are also in the regulatory pipeline. This new fund is designed to offer yields from Bitcoin-linked strategies. Unlike the IBIT, this ETF aims to provide a steady income for income-focused investors.

The SEC is expected to make a decision on options-linked income ETFs before the start of 2026. BlackRock’s IBIT and other ETFs like ETHA will likely follow the SEC’s generic listing standards once the decision is made. As of now, Bitcoin’s price has seen a rise, reflecting growing market interest.

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