The Securities and Exchange Commission approved Nasdaq’s proposal for the Philadelphia Stock Exchange to list Bitcoin index options with cash settlement.
Options are European contracts that track the Nasdaq Bitcoin Index. This index tracks a hundredth of the CME CF Bitcoin Real Time Index which is updated every 200 microseconds with the latest data from the major cryptocurrency exchanges. This approval was granted The SEC will publish the results on a accelerated schedule on Friday.
These new contracts have a cash settlement, so holders get the difference at the end of the contract between the Bitcoin strike price and spot price. The new contracts are cash-settled, meaning holders receive the difference between the Bitcoin spot price and the strike price at expiration.
Source: SEC
According to the SEC’s order, these contracts will be traded under QBTC, and with an increment minimum of $0.01, as well as a maximum position of 24,000 contracts on each side. This represents approximately 0.12% Bitcoin’s total supply.
Related: $1.26B Bitcoin ETF outflows spark ‘contrarian’ buy signal: Santiment
CFTC still needs approval
Despite SEC approval, options trading cannot start until the Commodity Futures Trading Commission (CFTC) grants their own exemption due to Bitcoin being classified as a product, falling under CFTC jurisdiction.
CME Group filed a complaint letter last October, arguing that the Bitcoin contracts were under CFTC jurisdiction. SEC pointed out that the Dodd-Frank Act Section 717 does not only apply to the financial sector. “novel derivative products” The SEC is able to exercise concurrent jurisdiction with the CFTC if the latter provides exemptive relief.
“The concept of shared jurisdiction between the Commission and the CFTC is not new,” In its submission, the SEC cites existing examples like mixed swaps or security futures.
Related: Nasdaq and S&P 500 Closed At Record Highs as Tech Stocks Rallied
SEC is becoming more crypto friendly
Under the leadership of Paul Atkins as Chairman, The SEC is moving towards a crypto-friendly regulatory approach. Atkins has moved to drop The former administration brought several high profile enforcement actions against crypto firms. They have also called publicly for more clear regulatory frameworks to encourage innovation instead of stifle.
Cointelegraph has reported that the agency is currently preparing a new website. “innovation exemption” This would include allow blockchain-based tokenized trading Tracking public shares of companies on crypto-platforms decentralized, without consent from the companies.
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Source: cointelegraph.com
