The US Securities and Exchange Commission, or SEC, has deferred its decision about whether it will approve the options trading of Ethereum (ETH), exchange-traded fund (ETFs), until April. 9.
This decision was announced in a filing on February 7, and it impacts Bitwise’s ETHW and Ethereum Mini-Trust, Grayscale’s ETHE, BlackRock’s ETHA, and Ethereum Trusts from Grayscale and BlackRock.
SEC stated that it needed more time to assess the potential impact on the market and evaluate the proposed proposal. Three times, the regulator has delayed its decision. The first two were in November and September 2024.
For the next 21-days, the Commission is inviting public comments. Market participants can submit their arguments for or against options for Ethereum ETFs.
Option Clearing Corporations (OCCs) and Commodity Futures Trading Commissions (CFTCs) also need to approve trading before it can commence.
Tools that are much-needed
Options contracts are financial instruments that enable buyers and seller to commit to buying or selling an asset within a specific timeframe at a price predetermined. As with futures, institutional investors also use options to manage their risk and hedge.
Bloomberg ETF senior analyst Eric Balchunas It was previously mentioned that options attract more liquidity, and also institutional investors. “big fish”In the market.
It was a stellar launch. By midday, the volume of BlackRock’s IBIT options trading debut The total amount of $1.6 billion. Balchunas is what they call it “a ton”For the first day.
The position limit on options contracts for spot Bitcoin ETFs, despite their impressive start, is just 25,000. This amount falls far short of the 400,000 that Jeffrey Park, Bitwise’s head of alpha strategy, believes should be the maximum.
Nasdaq has recently Filed to raise Park set the limit at $250,000 which is a risk-free amount of 2,89%, however, it was still lower than what Park had estimated as the “fair” value.
Ethereum Options, if approved, will likely face the same regulatory restrictions.
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