Two NYSE-affiliated options venues — NYSE Arca and NYSE American — have removed the 25,000-contract position limit that applied to options on 11 crypto exchange-traded funds. Each exchange filed three rule changes on March 10 to eliminate the contract position limits and related price discovery restrictions for options tied to Bitcoin and Ether ETFs listed on their platforms. The SEC acknowledged the filings and waived the normal 30-day waiting period, so the rule changes are now in effect.
The caps were originally imposed when crypto ETF options began trading in November 2024 to help guard against potential manipulation and excessive volatility. Lifting them brings treatment of these crypto ETF options in line with other commodity ETF options, giving institutional traders greater flexibility to build larger positions, which may increase liquidity and make it easier to enter and exit trades.
The amendments also permit these crypto ETF options to trade as FLEX options, enabling customizable contract terms such as non-standard strike prices, bespoke expiration dates and alternate exercise styles, which can support more tailored hedging and trading strategies.
The 11 covered products include BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity’s Wise Origin Bitcoin Fund (FBTC), ARK 21Shares Bitcoin ETF (ARKB), and various Bitcoin and Ether ETFs from Bitwise and Grayscale, among others. Separately, the SEC approved removal of the 25,000-contract limit for the Grayscale Bitcoin Trust ETF (GBTC) in late July.
In related activity, Nasdaq’s options exchange, Nasdaq ISE, has proposed raising the contract position limit for BlackRock’s IBIT to 1 million contracts; that proposal was under SEC review as of a Feb. 27 notice. Removing the smaller caps is expected to broaden institutional participation and could boost market depth for crypto ETF options.