Cboe to Launch First Cash-Settled Options Tied to Spot Bitcoin ETFs

Cboe Global Markets is set to debut the first-ever cash-settled index options tied to spot Bitcoin, marking a significant milestone for cryptocurrency derivatives. Scheduled to launch on December 2, the product will be listed on the Cboe Options Exchange under the ticker CBTX.

The Cboe Bitcoin U.S. ETF Index (CBTX) will reflect the performance of spot Bitcoin exchange-traded funds (ETFs) listed in the United States.

Regulated by the U.S. Securities and Exchange Commission, this index will utilize a modified market cap-weighted methodology to provide investors with indirect exposure to Bitcoin through a diversified basket of ETFs.

According to a November 22 press release, Cboe Labs and Cboe Global Indices jointly developed CBTX, offering market participants an innovative way to capitalize on Bitcoin price movements without holding the physical asset. Unlike traditional options tied to individual assets, the index options will be settled in cash upon expiration rather than through physical ETF delivery.

Mini Options and Customizable Contracts

Cboe is also introducing mini options for smaller-scale traders. These will be available under the ticker MBTX and offer 1/10th the notional value of standard options, making them more accessible for retail participants.

Additionally, cash-settled FLEX options will be launched for both CBTX and MBTX. These contracts are designed for greater customization, allowing traders to tailor exercise prices, expiration dates, and contract styles to meet specific trading strategies.

A Boost for Bitcoin and Crypto Derivatives

“The launch of options on the Cboe Bitcoin U.S. ETF Index provides a timely solution for traders seeking efficient exposure to spot Bitcoin,” said Rob Hocking, Cboe’s global head of product innovation. He emphasized that the offerings cater to both retail and institutional investors, meeting the growing demand for indirect access to Bitcoin's price dynamics.

This development comes amid Bitcoin's remarkable rally, with the cryptocurrency recently surpassing $99,000 and edging closer to the highly anticipated $100,000 milestone. The introduction of spot Bitcoin ETF options in the U.S. has already attracted substantial trading volumes, reinforcing the bullish sentiment surrounding Bitcoin.

With CBTX and MBTX, Cboe aims to expand the trading toolkit for market participants, offering innovative ways to navigate Bitcoin's price movements in a regulated environment.

Stay tuned for more updates as the cryptocurrency derivatives market continues to evolve.