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Operating three Ether exchange-traded funds (ETFs) run by crypto asset managers Grayscale and Bitwise, the New York Stock Exchange (NYSE) American LLC has requested a rule change to list and trade options for these funds.
The NYSE American sought in an Aug. 7 application to the Securities and Exchange Commission (SEC) permission to list and trade options for the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Mini (ETH). The trade underlined that allowing options trading on these Ether ETFs will help investors by offering a cheap investing instrument to increase Ether exposure. The submission also said that adding options trading will provide investors with a hedging tool to fulfill ETH product and position demand.
Comments on the proposal should be sent in throughout the following 21 days. Especially, the demand for a regulation modification by NYSE American would apply only to Grayscale and Bitwise, the two locations Ether funds mentioned on its exchange apply.
The Nasdaq options exchange requested the SEC on Aug. 6 to enable options trading on the BlackRock iShares Ethereum Trust (ETHA), and their proposal mirrors that of NYSE American. Nasdaq’s demand for ETH ETF alternatives would apply only to BlackRock’s fund, the sole Ether ETF listed on the Nasdaq, same as the suggested regulation modification by NYSE American.
Since the regulator has not yet approved options trading on spot Bitcoin ETFs, which debuted in January and currently command about $50 billion in assets under management, both NYSE American and Nasdaq might suffer delays in SEC clearance. The half dozen options exchanges, including Nasdaq, who had asked to offer options on spot BTC ETFs additional time was required to reach a judgment, the SEC said in July.
Hedge funds and financial planners make extensive use of options to protect against sudden market swings, including the 28% decline in Ether’s spot price on Aug. 5. More unusual tactics, including the “covered strangle” promoted by financial research company 10x Research, also draw their roots from them.
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