The United States Securities and Exchange Commission (SEC) has opened another round of public consultation on a proposed rule change for options trading on Bitcoin exchange-traded products (ETPs).
The review will examine whether exchanges have sufficient surveillance and enforcement mechanisms to handle Bitcoin options. Initial comments are due within 21 days of publication in the Federal Register, by May 15, 2024. Rebuttal comments may be submitted by May 29, 2024.
As a reminder, Bitcoin options are financial instruments that give the buyer the right, but not the obligation, to buy or sell Bitcoin at a specified price on or before a certain date. Options are typically used by sophisticated traders who are familiar with options pricing and market dynamics. Like all investments, options trading involves risks and may not be suitable for all investors.
The Commission previously sought comment on the proposed rule change and has summarized the feedback it received on the proposal. A majority of the comments supported allowing options on Bitcoin ETPs, arguing that it would increase liquidity and improve market efficiency:
“Further, commenters stated that approving the listing and trading of spot Bitcoin ETPs ‘would further bring Bitcoin within the regulatory perimeter by allowing additional regulated market participants such as CFTC-regulated designated contract markets and SEC-regulated broker-dealers to offer the product.’”
