Nasdaq seeks to ‘super-size’ option limits for BlackRock's Bitcoin ETF

The Nasdaq International Securities Exchange has filed a proposal with the US Securities and Exchange Commission (SEC) to increase the position limits for options on BlackRocks iShares Bitcoin Trust (IBIT) exchange-traded fund to 1 million.

Position limits exist to prevent any one investor from controlling too many option contracts on the same stock, thereby reducing the risk of manipulative schemes that could affect prices, according to the notice and copy of the filing from the SEC on Wednesday.

The Nasdaq has requested in its filing, which it sent on Nov. 13, to increase the BlackRock ETF limit from 250,000 contracts to 1 million, as the exchange has seen an ongoing increase in demand for IBIT, and the lower limit will impede trading activity and the strategies of investors, such as the use of effective hedging vehicles or an income-generating strategy.

Source: Eric Balchunas

Speaking to Cointelegraph, Vincent Liu, the chief investment officer at quantitative trading firm Kronos Research, said the SEC is likely to approve the proposal because “these adjustments are routine once an asset proves it can handle real volume. If approved, expect thicker order books, tighter spreads, and a more efficient options market.”

“Super-sizing IBIT option limits is a straight win for liquidity, allowing bigger traders to let real size flow without friction. More depth, tighter spreads, and cleaner markets follow when constraints come off.” Crypto derivatives meet institutional scale

Nasdaq previously filed to raise the limit from 25,000 to 250,000 in January because it was well above the trading volume minimum of 100 million shares to qualify.

Liu said this current push from the Nasdaq to “super-size IBIT option limits shows Bitcoin markets breaking out of their training wheels.”

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“Bigger bands mean bigger players can finally hedge, size up, and sharpen price discovery. A clear sign that crypto derivatives are shifting from niche to necessary,” he said.

“Higher limits will spark a short-term pop in volatility. With more room to warehouse risk and hedge cleanly, liquidity stops gapping and starts acting like a true institutional venue with calmer books, better fills, and flow that compounds instead of fragments.” Bitcoin ETF in same league as tech giants like Apple and Microsoft

Meanwhile, Adam Livingston, a Bitcoin (BTC) analyst and author, said in a series of X posts on Wednesday that the move by Nasdaq places BlackRocks Bitcoin ETF into the same category as the “largest, most liquid equities on Earth,” such as tech giants Apple and Microsoft.

Source: Adam Livingston

“They did it because the market has already decided Bitcoin is a mega-cap asset, whether Washington likes it or not. This is the moment every banker secretly feared,” he said.

“This is where Bitcoin stops being that weird decentralized experiment and becomes a fully weaponized regulated asset class with institutional-grade derivatives depth. You dont scale options by 40× unless you know demand is about to detonate.”

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