Options trading for Black Rock Exchange Traded Fund (ETF), iShares Bitcoin Trust ETFs (will go), launched on the Nasdaq on Nov. 19 and has raised more than $446 million in its first trading hours.
Senior Bloomberg ETF Analyst Eric Balchunas noted that The volume for the first day is “a ton”, with close to 98% of the call trade contracts. He added:
“It looks very bullish, especially the C100 Dec 20, which is basically betting the price of btc (Bitcoin) will double in the next month.”
The “call” in a call option contract gives the right to buy the security at a predetermined price, known as the strike price, within a specified period, called the expiration date.
According to Barchart, IBIT's cash trading volume reached $1.6 billion as of press time data.
More to come
The addition of options trading to IBIT followed quickly after the Office of the Comptroller of the Currency (OCC). November 18 Note which stated that it is “preparation for clearance, settlement and risk management”.
This approval gives the green light for options trading for IBIT and other spot bitcoin ETFs pointed out By Bloomberg ETF analyst James Seyfartwhich expects to list more of these products this week.
bit by bit CEO Hunter Horsley expects Option trading in BITB Inc It starts on November 20.
Unusual market dynamics
Balchunas has previously said that listing options for a bitcoin ETF is a positive development, as it provides more tools for traditional investors and attracts more liquidity from the “big fish.”
However, Jeffrey ParkHead of Alpha Strategies at Bitwise, expressed Bitcoin still has special treatment for business. He noted that IBIT only has 25,000 contracts as an approved position limit, which covers only 0.5% of the ETF's shares.
Option contract limits limit the number of contracts that can be held on the same side of the market. This limit varies by ETF based on the number of shares outstanding and trading volume.
According to Park, IBIT should have qualified for 400,000 options contracts, which amounted to only 7 percent of the outstanding shares. He also compares the IBIT limit to the CME Bitcoin futures limit of 2,000 contracts, equivalent to 175,000 contracts for IBIT.
Park added:
“While I'm excited that we've crossed the finish line — especially in 2024 — it's hard to ignore the special treatment that Bitcoin continues to receive. I long for the day when Bitcoin is no longer marked with an asterisk. “
He explained that the 25,000-contract limit may create “unusual market dynamics” and advised retail traders to explore arbitrage opportunities that may arise as a result of Bitcoin ETF options.
