Cboe Global Markets is gearing up to introduce the very first cash-settled options linked to the spot price of Bitcoin (BTC), with trading scheduled to kick off on December 2, as per a recent press release dated November 22.
These innovative options will be anchored on the Cboe Bitcoin US ETF Index (CBTX), which is specifically crafted to mirror the performance of spot Bitcoin ETFs that are listed on US exchanges.
The primary objective of this groundbreaking product is to offer investors a means to gain exposure to the fluctuations in the spot price of Bitcoin without the need to directly hold the cryptocurrency. The launch of these options closely follows the recent approval granted by US regulators for Bitcoin options earlier this month.
The launch will encompass standard as well as mini index options, in addition to customizable FLEX options, providing a spectrum of tools for investors to capitalize on price movements, manage risks, and express their market sentiments.
The Cboe Bitcoin US ETF Index marks a pioneering initiative in the US market. It utilizes a modified market cap-weighted methodology to track the performance of spot Bitcoin ETFs, offering a representative gauge of the asset’s performance.
The options will feature cash settlement, ensuring that positions are liquidated in cash at expiration, thereby eliminating the complexities associated with Bitcoin delivery. Moreover, the European-style exercise mechanism permits options to be executed solely on the expiration date, thereby minimizing the risks of early assignment.
Mini options, denoted by the ticker MBTX, will be available at 1/10th the notional value of the standard index options, catering to portfolios of varying sizes and providing flexibility for smaller traders.
FLEX options will enable customization for exercise prices, styles, and expiration dates, catering to more advanced trading strategies.
The introduction of these Bitcoin options aligns seamlessly with Cboe’s overarching strategy to bolster its digital asset derivatives portfolio.
The exchange already supports Bitcoin and Ethereum margin futures on its digital platform, with plans in place for these futures to transition to the Cboe Futures Exchange in 2025 pending regulatory approval.
Adam Inzirillo, Global Head of Data and Access Solutions at Cboe, emphasized the significance of this launch, stating, “This launch underscores the strength of Cboe’s ecosystem, integrating data, indices, and innovative products to meet diverse investor needs.”
Cboe continues to lead the charge in the evolution of digital asset markets, boasting the listing of the majority of US spot Bitcoin and Ethereum ETFs.