Nasdaq Seeks 4x Expansion of Options Trading Limit for BlackRock’s Bitcoin ETF

• Nasdaq seeks to quadruple the daily options limit for BlackRock’s IBIT from 250,000 to 1 million contracts due to growing institutional demand.
• IBIT dominates Bitcoin ETF options, with US$50 billion (AU$77 billion) in open interest, accounting for 98% of trading volume and 96% of open interest.
• The proposal includes FLEX options exemptions and aims to deepen liquidity, improve market efficiency, and facilitate larger, lower-risk trading strategies.

Nasdaq’s International Securities Exchange has applied to the US Securities and Exchange Commission (SEC) to raise the daily trading limit on options for BlackRock’s iShares Bitcoin Trust (IBIT) from 250,000 to 1,000,000 contracts. The request highlights growing interest from institutional investors seeking more sophisticated ways to hedge and manage Bitcoin exposure.

The filing emphasises that IBIT’s current cap restricts trading activity and limits the ability of market participants to implement larger, lower-risk strategies. With a market capitalisation of US$86.2 billion (AU$133.3 billion) and average daily volume of 44.6 million shares, IBIT now rivals the largest equity ETFs in terms of scale and liquidity. 

Nasdaq also seeks to exempt physically delivered FLEX options from any caps, aligning IBIT with other major commodity ETFs and encouraging trading to shift from over-the-counter markets to regulated venues.

Related: Bitcoin Pushes Past $90k on Mixed ETF Flows, While Analysts Warn of Fragile Support

IBIT Dominates Bitcoin Options Market

IBIT has rapidly become a dominant player in Bitcoin options markets. Open interest in its options exceeded US$50 billion (AU$77 billion) in October, comparable with the Deribit exchange. The ETF accounts for nearly all Bitcoin ETF options activity, with 98% of trading and 96% of open interest, demonstrating strong institutional adoption.

This increase marks the second time Nasdaq has sought to expand IBIT’s position limits. The first adjustment, raising the limit tenfold to 250,000 contracts earlier this year, was approved by the SEC in July after activity accelerated shortly after options were launched. 

Analysts note that the current proposal reflects continued growth in institutional participation, as larger investors increasingly seek regulated exposure to Bitcoin through ETFs.

Experts anticipate that a higher limit will enable more structured products linked to IBIT, facilitating larger allocations in a controlled manner. While short-term Bitcoin prices may not be immediately affected, the change is expected to improve market efficiency, deepen liquidity, and allow institutions to manage positions with reduced risk.

Public comments on the SEC proposal will be accepted until 17 December 2025, signalling that a final decision could be forthcoming as IBIT demonstrates its capacity to handle greater trading volumes.

Related: South Africa Flags Crypto and Stablecoin Gaps as Emerging Threat to Financial Stability

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