Cboe to Launch Cash-Settled Index Options for Spot Bitcoin ETFs
Cboe is set to launch the first cash-settled index options product for spot Bitcoin ETFs. The 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. The options will launch on December 2, 2024, exclusively listed and traded on the Cboe Options Exchange.
According to Cboe’s press release, 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. These index options will be cash-settled. This means positions are closed in cash at expiration, removing the complexities of physically delivering Bitcoin ETFs.
“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 Makes Huge Bitcoin ETF Announcement, Capitalizes on BTC’s Growth
With Bitcoin’s massive growth over the last month, asset management firms and networks are looking to capitalize for their customers. Spot Bitcoin ETFs have had great success since their launch earlier this year. Now that Bitcoin is nearing $100k, Bitcoin ETFs are expected to grow in popularity further. Cboe’s cash-settled index will be the first of its kind and a game changer for Bitcoin investors.
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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.”