Two major U.S. stock exchanges have eliminated trading limits for options on several popular cryptocurrency ETFs. The Securities and Exchange Commission has approved the immediate removal of the 25,000-contract position limits for these products on NYSE Arca and NYSE American. This change grants institutional investors greater flexibility and aligns crypto ETF options treatment more closely with other commodity-based funds.
Two New York Stock Exchange-affiliated exchanges have removed the 25,000 contract position limit on options tied to 11 crypto exchange-traded funds. NYSE Arca and NYSE American each filed three rule changes for options linked to Bitcoin and Ether ETFs.
These were acknowledged by the Securities and Exchange Commission on Sunday. The SEC waived the standard 30-day waiting period for both sets of proposed rule changes, meaning they are now in effect.
The limits were imposed when crypto ETF options first started trading in November 2024. Limits of this nature are typically imposed to prevent market manipulation and volatility.
The removal of those limits now puts them closer to how other commodity ETF options are treated. It gives institutions greater trading flexibility while also potentially boosting liquidity.
It also allows the crypto options to be traded as FLEX options. These include customizable terms such as non-standard strike prices, expiration dates and exercise styles.
A total of 11 crypto ETF options are affected by the rule changes. These include BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity’s Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB).
Bitcoin and Ether ETFs issued by Bitwise and Grayscale are also affected. In late July, the SEC approved removing the 25,000-contract position limit for the Grayscale Bitcoin Trust ETF (GBTC).
Meanwhile, one of Nasdaq’s options exchanges, Nasdaq International Securities Exchange, is seeking to raise the contract position limit for BlackRock’s IBIT to 1 million. That proposed rule change is still under review, according to a Feb. 27 notice from the SEC.
