SEC Approves Options for BlackRock's Bitcoin ETF

(Reuters) – The U.S. Securities and Exchange Commission has approved the listing and trading of options for BlackRock's spot bitcoin exchange-traded fund on the Nasdaq.

Options trading for BlackRock's fund, iShares Bitcoin Trust, has been officially approved with the ticker symbol IBIT, as announced by the regulator in a notice on Friday.

These index options are listed derivatives that provide a quick and inexpensive way to amplify exposure to bitcoin, offering institutional investors and traders an alternative means to hedge their exposure to the world’s largest cryptocurrency.

The SEC's approval of options tied to a bitcoin ETF marks a significant progression for cryptocurrency, a market once deemed nascent.

Since the launch of bitcoin ETFs earlier in the year, cryptocurrency has edged closer to mainstream acceptance.

Options give holders the right to buy or sell an asset, such as a stock or exchange-traded product, at a specified price before a set date.

Exchanges began applying for spot bitcoin ETF options once it became evident that the SEC would approve the underlying ETFs in January.

The SEC oversees the technical rule changes that exchanges must implement to list options and has assured that its existing surveillance procedures will apply to IBIT options.