NYSE Removes Position Limits on Crypto ETF Options

The SEC has approved a rule change that allows NYSE Arca and NYSE American to remove position limits on options tied to 11 spot Bitcoin and Ether exchange-traded funds (ETFs). The revised rules give these crypto ETF options the ability to trade as FLEX contracts, allowing market participants to customize terms such as strike prices, expiration dates, and exercise styles.

The rule change applies to a list of 11 crypto ETF options, including BlackRock's iShares Bitcoin Trust, Grayscale Bitcoin Trust, and Bitwise Ethereum ETF. These products had been trading under a 25,000-contract cap since their launch phases, but the new rules remove this limit and allow them to trade freely.

The SEC waived the usual waiting period for these rule changes, allowing them to take effect immediately. This decision was made due to the alignment of the crypto ETF options rules with those used by other exchanges, which did not create any new regulatory issues. The Federal Register notices state that the Commission designated both proposals to be operative upon filing.