NYSE Arca and NYSE American have eliminated the cap on options tied to Bitcoin and Ether ETFs, effective immediately after the SEC waived the waiting period.
The two exchanges affiliated with the New York Stock Exchange, NYSE Arca and NYSE American, have removed the 25,000-contract position limit on options linked to 11 digital asset ETFs. On March 10, each of the two exchanges filed three regulatory amendments in the Federal Register to eliminate position limits and price discovery restrictions for options tied to Bitcoin (BTC) and Ether (ETH) ETFs listed on their respective markets. The Securities and Exchange Commission acknowledged the amendments on Sunday, waiving the customary 30-day waiting period and making the new rules immediately effective.
The 25,000-contract limit had been imposed at the time of the launch of digital asset ETF options in November 2024. Restrictions of this kind are typically introduced to prevent market manipulation and excessive volatility. Their removal brings the treatment of crypto ETF options closer to that of options on ETFs linked to other commodities, offering institutions greater operational flexibility and potentially boosting liquidity, while also simplifying the opening and closing of positions.
Among the changes introduced by the regulatory amendments is the ability to trade crypto options as FLEX options, instruments that feature customizable terms such as non-standard strike prices, expiration dates, and tailored exercise styles.
A total of 11 digital asset ETFs are affected by the amendments. These include BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity’s Wise Origin Bitcoin Fund (FBTC), and the ARK 21Shares Bitcoin ETF (ARKB). Also included are Bitcoin and Ether ETFs issued by Bitwise and Grayscale.
Back in late July, the SEC had already approved the removal of the 25,000-contract limit for the Grayscale Bitcoin Trust ETF (GBTC). On the Nasdaq front, the Nasdaq International Securities Exchange has submitted a proposal to raise the position limit on BlackRock’s IBIT to 1 million contracts. According to an SEC notice dated February 27, that proposal is still under review.
