CBOE to launch first cash-settled index options product for spot Bitcoin ETFs

Chicago Board Options Exchange (CBOE) Global Markets, Inc., the securities exchange network, announced its plans to launch its first cash-settled index options related to the spot Bitcoin price on December 2. 

Derivatives and securities exchange network Cboe Global Markets, Inc., revealed plans to launch the first cash-settled index options linked to spot Bitcoin. The network announced the product would be available next month. 

CBOE to launch first spot bitcoin-related cash-settled options product 

Chicago Board Options Exchange announced the products would be exclusively listed and traded on the network’s exchange once launched. The securities exchange network also highlighted the options would be SEC-regulated.

CBOE also revealed the options would be based on the CBOE Bitcoin U.S ETF Index (CBTX).  The derivatives exchange expressed in a press release on November 22 that CBTX was a modified spot BTC ETF jointly developed by CBOE Labs and CBOE Global Indices. 

A message from John Palmer and David Howson:

Cboe has made the strategic decision to migrate our cash-settled bitcoin and ether futures contracts to Cboe Futures Exchange (CFE) in the first half of 2025, pending regulatory review and certain corporate approvals. pic.twitter.com/VoPieSCikx

— CboeDigital (@CboeDigital) April 25, 2024

CBOE revealed the index was designed to track Bitcoin spot ETFs listed on the U.S. stock exchange. In the press statement, the exchange suggested the product would allow participants to gain exposure and experience to spot Bitcoin ETFs and Bitcoin. 

CBOE added that by using the exposure, participants could easily manage risks, capitalize on the price movements observed, and reveal their opinions on the overall market. The securities exchange network explained that cash-settled meant the positions would be closed and settled in cash upon expiration instead of physically delivering the ETF. 

In the press statement, CBOE revealed the index options would eliminate risks of early assignment by ensuring they were only exercisable on expiry.

CBOE reveals plans to launch Mini BTC U.S ETF index options 

The Chicago Board Options Exchange also revealed that it would offer CBOE Mini BTC U.S ETF index options. According to the company, the mini BTC ETF options, with the ticker MBTX, would also launch on December 2. 

CBOE revealed the mini options would offer a tenth of the notional value of standard options. The company also confirmed that cash-settled FLEX options would be available for both MBTX and CBTX.

It added that these options would allow traders to vary their contractual options, including style, expiration date, and exercise price.

In the press statement, CBOE’s global head of product innovation, Rob Hocking, stated,

“Our new suite of options on the Cboe Bitcoin U.S. ETF Index offers a timely and compelling solution for traders to efficiently gain exposure to spot Bitcoin,”

He also emphasized that the company expected unique benefits from cash settlement. He added that the Flex options and the availability of various index sizes would give participants flexibility as they trade. 

He praised the company’s index value, adding it could appeal to both retail and institutional investors. Hocking added that the index would favor traders who wanted to capitalize on Bitcoin’s price movement without purchasing the asset.

In the press statement, the company revealed that the new options would expand its digital asset derivative offerings. CBOE added that the cash-settled BTC and Ether margin futures traded on the company’s digital exchange were expected to transition to the CBOE futures exchange in the first and second quarters of 2025. 

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