Nasdaq, in collaboration with CF Benchmarks, has filed with the U.S. Securities and Exchange Commission (SEC) to launch and trade Nasdaq Bitcoin Index Options (XBTX).
If approved, these options would allow investors to manage and hedge their bitcoin positions using a product that tracks the asset through the CME CF Benchmarks Bitcoin Real-Time Index (BRTI). This would mark the first cryptocurrency derivatives to be cleared by the U.S. Options Clearing Corporation (OCC).
Greg Ferrari, Nasdaq’s Vice President and Head of Exchange Business Management, highlighted the significance of this development, stating that it merges the innovation of crypto with the reliability of traditional securities markets, pushing forward the maturation of digital assets.
The proposed Nasdaq Bitcoin options would feature European-style exercise and cash settlement, with the final settlement value based on the CME CF Bitcoin Reference Rate New York Variant (BRRNY). This rate is calculated every second by aggregating bitcoin-to-U.S. dollar order data from major cryptocurrency exchanges.
Options, as listed derivatives, give holders the right but not the obligation to buy or sell an asset at a predetermined price within a specified timeframe. European-style options differ from American-style ones in that they can only be exercised at expiration.
CF Benchmarks CEO Sui Chung noted that these spot bitcoin options, settling to BRRNY, would complement existing futures and options contracts offered by CME, as well as the spot bitcoin exchange-traded funds (ETFs) already popular with investors. He emphasized that regulated crypto derivatives like these would give investors more sophisticated ways to gain exposure to Bitcoin.
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