On Wednesday, the Securities and Exchange Commission approved filings for options trading on several spot Ethereum ETFs.
The green lighting of the requests was “100% expected,” according to James Seyffart, ETF research analyst at Bloomberg Intelligence. The approvals included the Nasdaq ISE’s request to list option contracts on BlackRock’s iShares Ethereum Trust (ETHA) just a day after the asset manager tapped an additional digital asset custodian for the fund.
SEC filings (see here and here) show investors can now trade options tied to Bitwise Ethereum ETF (ETHW) and the Grayscale Ethereum Trust (ETHE), among others.
The move may make Ether, the second largest cryptocurrency by market capitalization after Bitcoin, more attractive to institutional traders.
Last summer, the SEC approved the listing of multiple spot Ethereum ETFs, which are based on the spot price of Ether. Now, investors can trade options—which allow investors to leverage and hedge risk—tied to these funds.
But the approval of options on an exchange-traded product doesn’t have implications for the crypto industry, Matt Apkarian, associate director of product development at Cerulli Associates, told etf.com.
Regarding the approval of Nasdaq ISE’s request to list option contracts on ETHA, he added, “The SEC is looking to ensure that Nasdaq ISE can effectively operate an options exchange market for the underlying, which basically just means there is sufficient volume in the underlying to show that there are interested counterparties.”
“These options will be incredibly volatile because of the volatility of the underlying investment, and changes in the volatility will have a significant effect on the price of the options,” Apkarian cautioned.
The latest news comes as President Donald Trump’s administration embraces a friendlier stance toward crypto than what was previously seen under Gary Gensler’s SEC. Trump’s pro-crypto stance, which has included plans to create a strategic crypto reserve that will include Bitcoin, Ethereum, XRP, Solana and Cardano, has led to an influx of new investment products and digital tokens.
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