Nasdaq Seeks to Boost Trading Cap for Options on Top Bitcoin ETF

Nasdaq’s International Securities Exchange proposed quadrupling the daily trading limit for options tied to BlackRock Inc.’s iShares Bitcoin Trust ETF as demand from investors increases.

In a Wednesday filing, the Securities and Exchange Commission said the bourse asked to raise the current 250,000-contract ceiling for the exchange-traded fund, which trades under the IBIT ticker, to 1 million.

“The Exchange notes that the proposed position limits and exercise limits for options on IBIT are consistent with existing position limits and exercise limits for options on iShares MSCI Emerging Markets, iShares China Large-Cap ETF and iShares MSCI EAFE ETF,” the filing said.

Nasdaq’s request reflects not only rising trading volumes but also a deeper shift in market dynamics, said Tim Sun, a senior researcher at Hashkey Group. It “points to substantial needs for hedging, risk management, and more sophisticated strategy construction,” he said.

This marks Nasdaq’s second request to expand IBIT’s daily contract limit. In January, shortly after options on the ETF were approved, the exchange moved to increase the ceiling tenfold to 250,000 as activity quickly accelerated. The SEC approved that request in July.

IBIT, by far the largest Bitcoin ETF with about $70 billion in assets, has become a crucial vehicle for crypto options trading since contracts were first listed. Open interest in IBIT options surged to more than $50 billion at its peak in October, rivaling that on Deribit, the largest crypto options exchange.