6 months ago
Options trading for BlackRock’s exchange-traded money (ETF), iShares Bitcoin Trust ETF (IBIT), started connected Nov. 19 astatine Nasdaq and has already moved implicit $446 cardinal successful its archetypal trading hours.
Bloomberg elder ETF expert Eric Balchunas remarked that the volume is “a ton” for a archetypal day, with astir 98% of trading contracts being calls. He added:
“Seems precise bullish, esp the Dec20th C100, which is fundamentally betting terms of btc [Bitcoin] volition treble successful the adjacent month.”
A “call” successful an enactment declaration gives the close to acquisition a information astatine a predetermined price, known arsenic the onslaught price, wrong a circumstantial period, called the expiration date.
IBIT’s spot trading measurement reached $1.6 cardinal arsenic of property time, based connected Barchart data.
More to come
The summation of options trading to IBIT came rapidly pursuing the Office of the Comptroller of the Currency’s (OCC) Nov. 18 memo that stated it was “preparing for the clearance, settlement, and hazard management.”
The support gives the greenish airy for options trading for IBIT and different spot Bitcoin ETFs, as pointed out by Bloomberg ETF expert James Seyffart, who expects much listing of these products this week.
Bitwise CEO Hunter Horsley expects options trading connected the firm’s BITB to commencement connected Nov. 20.
‘Unusual marketplace dynamics’
Balchunas antecedently said that options listing for spot Bitcoin ETFs is simply a affirmative development, arsenic it gives much tools for accepted investors and attracts much liquidity from “big fish.”
However, Jeffrey Park, caput of alpha strategies astatine Bitwise, stated that Bitcoin inactive receives peculiar attraction for trading. He pointed retired that IBIT has lone 25,000 contracts arsenic an approved presumption limit, representing lone 0.5% of the ETF’s shares.
An enactment declaration bounds limits the fig of contracts that tin beryllium held connected the aforesaid broadside of the market. The bounds varies by ETF based connected the fig of outstanding shares and trading volume.
According to Park, IBIT should person qualified for 400,000 options contracts, which would person reached lone 7% of the outstanding shares. He besides compares IBIT’s bounds with CME Bitcoin futures contracts’ 2,000-contract limit, equivalent to 175,000 contracts for IBIT.
Park added:
“While I’m thrilled we’ve crossed the decorativeness enactment — particularly successful 2024 — it’s hard to disregard the lingering peculiar attraction Bitcoin continues to receive. I agelong for the time erstwhile Bitcoin is nary longer marked with an asterisk.”
He explained that the 25,000-contract bounds mightiness make “unusual marketplace dynamics” and advised retail traders to research arbitrage opportunities that could originate arsenic a effect of Bitcoin ETF options.
The station IBIT options trading measurement surges to $446M successful opening hours, $1.6B by mid-day appeared archetypal connected CryptoSlate.
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