Regulatory approval paves the way for institutional investors to trade ether options on a US securities exchange.
The U.S. Securities and Exchange Commission (SEC) has given the green light for the trading of options tied to ether exchange-traded funds (ETFs). The approval comes after a filing from Nasdaq ISE, which asked to list options contracts on BlackRock‘s iShares Ethereum Trust (ETHA).
Ether options trading allows investors to buy and sell contracts that derive their value from the price of Ethereum.
These contracts can be used for both speculative and hedging purposes.
Options trading involves buying a call or put option, which gives the holder the right to purchase or sell Ethereum at a predetermined price.
Ether options are traded on various platforms, including exchanges like Deribit and Binance.
The main advantage of ether options is their ability to provide leverage and flexibility in trading strategies.
Key Details of the Approval
The SEC approved the filing, allowing options traders to buy and sell ETHA. This move is significant as it marks the first time that options can be traded on a single ether ETF. Previously, other funds were listed on the New York Stock Exchange’s Arca and Cboe.
Background on the Filing
Nasdaq ISE filed for this product in July last year. The SEC had initially postponed its decision but ultimately approved the filing after considering the request. James Seyffart, ETF analyst at Bloomberg Intelligence, noted that the approval was ‘100% expected’.
What This Means for Institutional Investors
Options are a popular trading vehicle to leverage and hedge risk. They are especially attractive to institutional investors who want to control large amounts of shares. The approval of options trading on ETHA is likely to attract more institutional investors to this product, given its unique status as the only spot ether ETF that options can be traded on.
Next Steps
The next steps for BlackRock and Nasdaq ISE are unclear. However, the approval of options trading on ETHA marks an important milestone in the development of the crypto market. As the regulatory landscape continues to evolve, investors will be watching closely for further developments.
The crypto market refers to the global network of buyers and sellers of cryptocurrencies, such as Bitcoin and Ethereum.
It is a decentralized marketplace where transactions are made without the need for intermediaries like banks.
The crypto market is highly volatile, with prices fluctuating rapidly due to factors like supply and demand, regulatory changes, and global economic trends.
According to a report by CoinMarketCap, the total market capitalization of cryptocurrencies reached an all-time high of over $3 trillion in 2021.
- coindesk.com | SEC Approves Trading of Ether ETF Options
