Derivatives and securities exchange network Cboe Global Markets, Inc today announced plans to launch the first cash-settled index options related to the price of spot Bitcoin beginning Monday, December 2.
Exclusively listed and traded on Cboe Options Exchange, these options will be SEC-regulated and based on the new Cboe Bitcoin U.S. ETF Index (Ticker: CBTX).
The Cboe Bitcoin U.S. ETF Index, jointly developed by Cboe Labs and Cboe Global Indices, is the market’s first U.S. spot Bitcoin ETF index. This modified market cap-weighted index is designed to track the performance of a basket of spot Bitcoin ETFs listed in the U.S. Moreover, it is designed to correlate to the price of spot Bitcoin, making it a representative measure of the asset.
Options on the Cboe Bitcoin U.S. ETF Index will allow market participants to gain exposure to spot Bitcoin ETFs – and indirectly to Bitcoin itself – enabling them to capitalize on price movements, manage risk, and express their market views. These index options will be cash-settled, meaning positions are closed in cash at expiration, removing the complexities of physically delivering Bitcoin ETFs. In addition to cash settlement, these index options will offer European-style exercise, meaning they are exercisable only on the expiration date, eliminating the risks of early assignment.
Alongside options on the standard-sized index, Cboe plans to offer Cboe Mini Bitcoin U.S. ETF Index options1 (Ticker: MBTX) at launch. At 1/10th the notional value of the standard options, these mini options aim to offer greater granularity and flexibility in managing basis risk as well as appeal to portfolios of varying sizes.
Cboe also plans to offer cash-settled FLEX options on both the Cboe Bitcoin U.S. ETF Index and the Cboe Mini Bitcoin U.S. ETF Index, allowing traders to customize key contract terms such as exercise price, exercise style, and expiration date – potentially enabling traders to hold larger positions than typically allowed for using standard options contracts.
“Our new suite of options on the Cboe Bitcoin U.S. ETF Index offers a timely and compelling solution for traders to efficiently gain exposure to spot Bitcoin,” said Rob Hocking, Global Head of Product Innovation at Cboe. “We expect the unique benefits of cash-settlement, combined with the availability of various index sizes and FLEX options, will give customers more flexibility in their trading strategies. Our index options offer a unique value proposition that we believe will appeal to both institutional participants and retail traders alike, who are looking to capitalize on or hedge against Bitcoin’s price movements without directly holding the asset.”
Cboe’s new suite of options on the Cboe Bitcoin U.S. ETF Index will further expand its digital assets derivatives offerings, which already include cash-settled Bitcoin and Ether margin futures listed and traded on Cboe Digital Exchange that are expected to transition to Cboe Futures Exchange in the first half of 2025, pending regulatory review.
In addition, Cboe’s BZX Equities Exchange is a leading venue for spot U.S. crypto ETFs, listing the majority market share of spot Bitcoin ETFs and spot Ether ETFs available for trading in the U.S.
Adam Inzirillo, Global Head of Data and Access Solutions at Cboe, said:
“This latest initiative showcases the strength of Cboe’s exchange ecosystem – from listing and trading spot Bitcoin ETFs on our U.S. equities exchange, to generating data that drives index creation, and now launching innovative tradable products like Cboe Bitcoin U.S. ETF Index Options. Our ability to leverage the full breadth of our platform to continually bring new solutions to market is a key differentiator for Cboe and a major benefit to our customers.”
