Nasdaq has applied for Bitcoin index options in collaboration with CF Benchmark, aiming to provide a new means for investors to gain exposure to Bitcoin.
Leading stock exchange Nasdaq has filed for the approval of the US Securities and Exchange Commission (SEC) to list and trade Bitcoin Index Options (XBTX).
The market operator announced the move in a press release today, stating it was a collaboration with the UK Financial Conduct Authority (FCA) regulated benchmark administrator, CF Benchmark.
Pending the SEC’s approval, the Bitcoin index options will provide investors with an alternative means of investing in Bitcoin. The index options will track the price performance of Bitcoin on the Chicago Mercantile Exchange (CME) CF Bitcoin Real-Time Index (BRT).
The Tuesday filing came despite the SEC’s hesitancy in approving an options product for any of the Bitcoin spot ETFs. The Chicago Board Options Exchange (CBOE), New York Stock Exchange (NYSE), and Nasdaq have all applied to list options for nine Bitcoin spot ETFs but have not made headway with the regulator.
Cash Settlement
As typical of index options, the XBTX will provide cash settlements to traders. The fund will be traded using European-style exercise, meaning investors cannot exercise options until expiration.
The XBTX’s final settlement value will be determined by the price of the CME CF Bitcoin Reference Rate-New York Variant (BRRNY) divided by 100. The XBTX will also mirror the Bitcoin futures and options contracts the CME offers.
More Investment Varieties for Bitcoin
CEO of CF Benchmarks, Sui Chung, noted that the index options would provide more options for investors to gain exposure to the largest cryptocurrency asset. He also said that it would attract more institutions to Bitcoin as the spot ETFs did and generally improve market liquidity.
The Bitcoin spot ETFs were an instant success upon launch and have attracted institutional investors to the crypto market. On their first day, the products’ volume exceeded $4 billion. Since then, they have seen a cumulative net inflow of over $18 billion.
With the index options, investors can now gain exposure to Bitcoin and leverage on the growing traction of the crypto asset. Meanwhile, Bitcoin fell 2% on Tuesday, trading at $62,040 at press time.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
