Cboe BZX Exchange proposes options trading on spot Ethereum ETFs
2025-02-05
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Cboe BZX Exchange has proposed to amend Rule 19.3 to allow the exchange to list and trade options on spot Ethereum exchange-traded funds. This is a "competitive filing" based on a similar proposal submitted by NYSE American, which is currently pending with the U.S. Securities and Exchange Commission.
The filing specifically mentions the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, the Grayscale Ethereum Mini Trust, "and any trust that holds ether."
Rule 19.3 currently allows options trading on fund shares tied to specific investments, like financial instruments, money market assets, precious metals (considered commodities) and Bitcoin (a cryptocurrency also classified as a commodity), the filing states, and Ethereum funds work the same way — they are Ethereum-backed ETFs set up as trusts.
"The Exchange believes that offering options on the Ethereum Funds will benefit investors by providing them with an additional, relatively lower cost investing tool to gain exposure to spot ether as well as a hedging vehicle to meet their investment needs in connection with ether products and positions," Cboe BZX wrote in the filing.
Options trading on spot Bitcoin ETFs officially went live in November 2024.
Options and derivatives provide liquidity and price discovery for larger institutions, giving them exposure to the underlying asset's price action. Large institutions typically use options as a trading hedge, while retail traders use options for speculation. Options on spot ETFs could ease bitcoin price volatility in the long run by increasing market liquidity — though early conditions suggest continued high volatility as the product goes through price discovery, crypto derivatives trader Gordon Grant told The Block in December.
The nine spot Ethereum ETFs generated $1.5 billion in trading volume on Monday amid the crypto market plunge. This eclipsed the previous $1.22 billion record set on Dec. 19 — the largest since their July 23, 2024 launch day, according to The Block’s Data Dashboard.
ETH is trading down 1.62% over the last 24 hours to around $2,746, according to The Block's price page. Over the last 24 hours, the cryptocurrency saw $40.2 billion of trading volume.
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