CBOE Global Markets plans to launch the first cash settlement option linked to spot Bitcoin (BTC) prices, with trading scheduled to begin on December 2nd, according to a November 22nd press release. That's what it means.
These options are based on the Cboe Bitcoin US ETF Index (CBTX), which is designed to reflect the performance of spot Bitcoin ETFs listed on US exchanges.
This innovative product aims to provide investors with exposure to Bitcoin price movements without directly owning the cryptocurrency. The launch comes days after U.S. regulators gave Bitcoin options the final green light earlier this month.
This release includes standard and mini-index options, as well as customizable FLEX options, giving you a variety of tools to take advantage of price movements, manage risk, and express your view of the market. I will.
Approach to Bitcoin options
The Cboe Bitcoin US ETF Index is the first ETF index of its kind in the United States. We utilize a modified market cap weighted approach to track the performance of Spot Bitcoin ETFs. By reflecting the trend of Bitcoin's spot price, this index provides a representative measure of the asset.
This option features cash settlement, ensuring that positions are closed in cash at expiration, eliminating the complexity of Bitcoin ETF delivery. Additionally, the European-style exercise mechanism allows options to be exercised only on the expiration date, minimizing the risk of early assignment.
Mini options will be available under the ticker MBTX at one-tenth the notional value of standard index options, making them attractive to portfolios of various sizes and offering flexibility to smaller traders.
FLEX options allow you to customize strike prices, styles, and expiration dates to suit sophisticated trading strategies.
Expansion into digital assets
The introduction of these Bitcoin options is consistent with Cboe's broader strategy to strengthen its digital asset derivatives portfolio.
The exchange already supports margin futures for Bitcoin and Ethereum on its digital platform. Pending regulatory approval, these futures are expected to be migrated to the Cboe Futures Exchange in 2025.
Adam Ingirillo, global head of data and access solutions at Cboe.
“This launch highlights the strength of Cboe's ecosystem, which integrates data, indexes and innovative products to serve the diverse needs of investors.”
Cboe continues to be at the forefront of the evolution of digital asset markets, listing the majority of U.S. Spot Bitcoin ETFs and Ethereum ETFs.
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