Cboe to Launch the First Cash-Settled Options Product Related to Spot Bitcoin, Beginning Monday, December 2

Rhea-AI Summary

Cboe Global Markets announced the launch of the first cash-settled index options for spot Bitcoin, starting December 2. The options will be based on the new Cboe Bitcoin U.S. ETF Index (CBTX), designed to track spot Bitcoin ETF performance. The offering includes standard-sized options, mini options at 1/10th the notional value, and FLEX options for customization. These SEC-regulated products will feature cash settlement and European-style exercise, eliminating early assignment risks and physical delivery complexities. The initiative expands Cboe's digital assets derivatives offerings, complementing their existing Bitcoin and Ether futures products.

Positive

• First-mover advantage in cash-settled spot Bitcoin ETF index options
• Product diversification with standard, mini, and FLEX options offerings
• Expansion of digital assets derivatives portfolio
• Leading market position in spot crypto ETF listings

Negative

• None.

Insights

Financial Markets Expert

This launch represents a significant milestone in the cryptocurrency derivatives market. The introduction of cash-settled Bitcoin ETF index options provides institutional investors with a regulated, familiar framework to gain Bitcoin exposure without direct cryptocurrency ownership. The key advantages include:

• Cash settlement eliminates custody complexities
• European-style exercise reduces assignment risk
• Multiple contract sizes (standard and mini) enhance accessibility
• FLEX options enable customization for institutional needs

The timing aligns with growing institutional demand for crypto derivatives following spot Bitcoin ETF approvals. This product could drive substantial trading volume for CBOE, potentially boosting revenue through transaction fees. The competitive advantage of being first-to-market with SEC-regulated Bitcoin ETF options positions CBOE strongly in the expanding crypto derivatives space.

Derivatives Strategist

The multi-tiered product structure demonstrates sophisticated market engineering. The mini contracts at 1/10th notional value create a balanced ecosystem serving both retail and institutional traders. The FLEX options component is particularly strategic, as it allows for:

• Custom strike prices to match precise hedging needs
• Flexible expiration dates for targeted risk management
• Larger position limits compared to standard options

This comprehensive approach addresses current market gaps in Bitcoin derivatives trading, potentially capturing significant market share before competitors enter. The cash settlement mechanism also reduces counterparty risk and operational complexity, making it more attractive to traditional financial institutions.

• The first cash-settled index options related to the price of spot Bitcoin  
• Options are based on the new Cboe Bitcoin U.S. ETF Index, designed to reflect the performance of spot Bitcoin ETFs listed on U.S. exchanges
• Options on standard and mini index, as well as FLEX options contracts, available at launch
• Provides exposure to spot Bitcoin price movements through options, expanding investor access to crypto derivatives

CHICAGO, Nov. 22, 2024 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced plans to launch the first cash-settled index options related to the price of spot Bitcoin beginning Monday, December 2. Exclusively listed and traded on Cboe Options Exchange, these options will be SEC-regulated and based on the new Cboe Bitcoin U.S. ETF Index (Ticker: CBTX).

The Cboe Bitcoin U.S. ETF Index, jointly developed by Cboe Labs and Cboe Global Indices, is the market's first U.S. spot Bitcoin ETF index. This modified market cap-weighted index is designed to track the performance of a basket of spot Bitcoin ETFs listed in the U.S. Moreover, it is designed to correlate to the price of spot Bitcoin, making it a representative measure of the asset.

Options on the Cboe Bitcoin U.S. ETF Index will allow market participants to gain exposure to spot Bitcoin ETFs – and indirectly to Bitcoin itself – enabling them to capitalize on price movements, manage risk, and express their market views. These index options will be cash-settled, meaning positions are closed in cash at expiration, removing the complexities of physically delivering Bitcoin ETFs. In addition to cash settlement, these index options will offer European-style exercise, meaning they are exercisable only on the expiration date, eliminating the risks of early assignment.

Alongside options on the standard-sized index, Cboe plans to offer Cboe Mini Bitcoin U.S. ETF Index options¹ (Ticker: MBTX) at launch. At 1/10^th the notional value of the standard options, these mini options aim to offer greater granularity and flexibility in managing basis risk as well as appeal to portfolios of varying sizes. Cboe also plans to offer cash-settled FLEX options on both the Cboe Bitcoin U.S. ETF Index and the Cboe Mini Bitcoin U.S. ETF Index, allowing traders to customize key contract terms such as exercise price, exercise style, and expiration date – potentially enabling traders to hold larger positions than typically allowed for using standard options contracts.

"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," said Rob Hocking, Global Head of Product Innovation at Cboe. "We expect the unique benefits of cash-settlement, combined with the availability of various index sizes and FLEX options, will give customers more flexibility in their trading strategies. Our index options offer a unique value proposition that we believe will appeal to both institutional participants and retail traders alike, who are looking to capitalize on or hedge against Bitcoin's price movements without directly holding the asset."

Cboe's new suite of options on the Cboe Bitcoin U.S. ETF Index will further expand its digital assets derivatives offerings, which already include cash-settled Bitcoin and Ether margin futures listed and traded on Cboe Digital Exchange that are expected to transition to Cboe Futures Exchange in the first half of 2025, pending regulatory review. In addition, Cboe's BZX Equities Exchange is a leading venue for spot U.S. crypto ETFs, listing the majority market share of spot Bitcoin ETFs and spot Ether ETFs available for trading in the U.S.

Adam Inzirillo, Global Head of Data and Access Solutions at Cboe, said: "This latest initiative showcases the strength of Cboe's exchange ecosystem – from listing and trading spot Bitcoin ETFs on our U.S. equities exchange, to generating data that drives index creation, and now launching innovative tradable products like Cboe Bitcoin U.S. ETF Index Options. Our ability to leverage the full breadth of our platform to continually bring new solutions to market is a key differentiator for Cboe and a major benefit to our customers."

For more information about the new Cboe Bitcoin U.S. ETF Index Options, please visit Cboe's Product Updates Notices.

About Cboe Global Markets

Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing, and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, and FX across North America, Europe, and Asia Pacific. Above all, we are committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. To learn more about the Exchange for the World Stage, visit www.cboe.com.

Cboe Media Contacts			Cboe Analyst Contact
Angela Tu	Tim Cave			Kenneth Hill, CFA
+1-646-856-8734	+44 (0) 7593-506-719			+1-312-786-7559
atu@cboe.com	tcave@cboe.com			khill@cboe.com

 

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¹ Listed on the Cboe Mini Bitcoin U.S. ETF Index, which is based on 1/10^th the value of the Cboe Bitcoin U.S. ETF Index. 

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SOURCE Cboe Global Markets, Inc.

FAQ

When will Cboe launch Bitcoin ETF Index Options (CBOE)?

Cboe will launch Bitcoin ETF Index Options on Monday, December 2, 2024.

What is the ticker symbol for Cboe's Bitcoin ETF Index?

The Cboe Bitcoin U.S. ETF Index trades under the ticker symbol CBTX, while the mini version trades as MBTX.

How are Cboe's Bitcoin ETF Index Options settled?

The options are cash-settled at expiration, eliminating the need for physical delivery of Bitcoin ETFs.

What is the size difference between standard and mini Bitcoin ETF Index options on Cboe?

Mini Bitcoin ETF Index options (MBTX) are 1/10th the notional value of the standard options (CBTX).