CBOE will launch cash-settled Bitcoin index options based on the CBTX index on December 2nd. The option provides indirect exposure to Bitcoin via the US Spot Bitcoin ETF. A mini option and a customizable FLEX option will also be available at launch.
CBOE Global Markets, a leader in derivatives and stock exchange networks, has announced plans to launch the first cash-settled index option linked to spot Bitcoin prices.
Launching on December 2, 2024, this new service is based on the Cboe Bitcoin US ETF Index (CBTX) and represents a significant development in the world of crypto derivatives.
The CBTX Index, a modified market cap weighted benchmark developed by Cboe Labs and Cboe Global Indices, is designed to track the performance of a basket of Bitcoin exchange-traded funds (ETFs) listed on U.S. exchanges. . The index provides indirect exposure to spot Bitcoin by reflecting the performance of these ETFs, offering investors a way to gain exposure to Bitcoin price movements without directly owning the asset. It is intended to.
Future options will be listed exclusively on the Cboe Options Exchange, which is regulated by the U.S. Securities and Exchange Commission (SEC), and will be cash settled at expiration. This means that positions are closed in cash, rather than requiring physical delivery of the Bitcoin ETF, simplifying the process for traders.
Additionally, these options feature European-style exercise, meaning they can only be exercised on the expiration date, eliminating the risk of early assignment.
To further expand market access, Cboe will also offer a mini option (MBTX) at launch. These options have one-tenth the notional value of standard options and offer greater flexibility for smaller portfolios and more granular risk management.
Additionally, Cboe plans to introduce cash-settled FLEX options on both CBTX and MBTX, allowing traders to customize key contract terms such as strike price, style, and expiration date.
Rob Hocking, Global Head of Product Innovation at Cboe, highlighted that the new options product is designed to meet the growing demand for efficient exposure to Bitcoin.
The launch is in line with Cboe’s broader digital asset strategy, which includes Bitcoin and Ether futures to help both institutional and retail investors take advantage of and hedge against Bitcoin price movements. The aim is to provide innovative tools for
This move underscores Cboe’s efforts to expand its crypto derivatives offering and strengthen its position as a leading venue for crypto-related trading products.
