Nasdaq Files to List and Trade Bitcoin Index Options

These options will track the price of Bitcoin (BTC) represented by the CME CF Bitcoin Real-Time Index

Nasdaq has filed an application with the U.S. Securities and Exchange Commission (SEC) to list and trade Bitcoin Index Options.

These options will track the price of Bitcoin (BTC) as represented by the CME CF Bitcoin Real-Time Index, according to a press release. The move is set to bring greater transparency and solidity to the crypto market.

Pending regulatory approval, this initiative will enable investors to better manage and hedge their crypto positions, ultimately enhancing liquidity and maturity within this digital asset class.

Bitcoin index options explained

The options will feature European-style exercise and cash settlement, with final settlement values determined by the CME CF Bitcoin Reference Rate — New York Variant. This translates to the options being settled in cash, not Bitcoin.

The benchmark provides a clear reference rate that will be pegged to a specific time, critical in a market like crypto, which is continuously traded globally.

If approved, the Nasdaq Bitcoin Index Options will offer institutional and retail investors another risk management tool, adding to the existing futures and options contracts linked to Bitcoin.

The proposed index options are touted as a cost-effective way to gain leveraged exposure to Bitcoin, presenting institutional investors and traders with an alternative method to hedge their exposure to the world’s largest cryptocurrency.

In related news, earlier this year, the SEC approved spot Bitcoin ETF trading, prompting several large financial institutions to file for their own spot Bitcoin ETFs.

Nasdaq is partnering with CF Benchmarks to make this possible.