Cboe Global Markets is making waves in the digital asset market with the upcoming launch of the first cash-settled options tied to the price of spot Bitcoin (BTC). The trading for these options is scheduled to kick off on Dec. 2, as revealed in a recent press release on Nov. 22.
The new options will be based on the Cboe Bitcoin US ETF Index (CBTX), which has been meticulously crafted to mirror the performance of spot Bitcoin ETFs listed on US exchanges. This groundbreaking product is designed to offer investors exposure to Bitcoin price movements without the need to directly hold the cryptocurrency. The launch of these options comes hot on the heels of the final approval granted by US regulators for Bitcoin options earlier this month.
The options launch will encompass standard and mini index options, as well as customizable FLEX options, providing a diverse array of tools for investors to capitalize on price fluctuations, manage risk, and express their market sentiments.
The Cboe Bitcoin US ETF Index stands out as the first of its kind in the US, utilizing a modified market cap-weighted methodology to track the performance of spot Bitcoin ETFs. By closely tracking spot Bitcoin price trends, the index offers a precise gauge of the asset’s performance.
These options will feature cash settlement, ensuring that positions are closed in cash upon expiration, thus eliminating the complexities associated with Bitcoin ETF delivery. Moreover, the European-style exercise mechanism of the options allows for execution only on the expiration date, reducing the risks of early assignment.
In a move to cater to a broader range of investors, mini options under the ticker MBTX will be available at 1/10th the notional value of standard index options, making them appealing to portfolios of varying sizes and providing flexibility for smaller traders. Additionally, FLEX options will enable customization of exercise prices, styles, and expiration dates, catering to more sophisticated trading strategies.
The introduction of Bitcoin options represents a strategic move by Cboe to expand its digital asset derivatives portfolio. The exchange already supports Bitcoin and Ethereum margin futures on its digital platform, with plans to transition these futures to the Cboe Futures Exchange in 2025 pending regulatory approval.
Adam Inzirillo, Global Head of Data and Access Solutions at Cboe, expressed the significance of this launch, stating that it underscores the strength of Cboe’s ecosystem in integrating data, indices, and innovative products to meet the diverse needs of investors.
Cboe continues to lead the way in the evolution of the digital asset market, listing the majority of US spot Bitcoin and Ethereum ETFs. This move further solidifies the exchange’s position as a key player in the digital asset space, paving the way for further innovation and growth in the industry.