NYSE Arca and NYSE American have removed the 25,000-contract position limit on options linked to 11 cryptocurrency exchange-traded funds. Each exchange filed three rule changes in the Federal Register on March 10, targeting options tied to Bitcoin and Ether ETFs listed on their respective platforms. The Securities and Exchange Commission acknowledged the filings on Sunday and waived the standard 30-day waiting period, putting the changes into immediate effect.
The position limits were originally introduced in November 2024 when crypto ETF options first began trading. Such restrictions are commonly used to guard against market manipulation and excessive volatility. Their removal brings crypto ETF options closer in line with how options on other commodity ETFs are typically regulated.
Eliminating the caps is expected to give institutional investors greater trading flexibility and could improve overall market liquidity. Larger position allowances make it easier for participants to enter and exit trades without facing artificial constraints. The changes also open the door for these options to be traded as FLEX options, which allow for customizable terms including non-standard strike prices, expiration dates, and exercise styles.
A total of 11 crypto ETF options are affected by the rule changes. Among the products included are BlackRock‘s iShares Bitcoin Trust, Fidelity‘s Wise Origin Bitcoin Fund, and the ARK 21Shares Bitcoin ETF. Bitcoin and Ether ETFs issued by Bitwise and Grayscale are also covered under the new rules.
The move follows a similar action taken in late July, when the SEC approved the removal of the 25,000-contract position limit specifically for the Grayscale Bitcoin Trust ETF. The latest changes extend that treatment more broadly across the crypto ETF options landscape. This signals a gradual regulatory shift toward treating crypto-linked products more consistently with traditional commodity instruments.
Separately, Nasdaq International Securities Exchange, one of Nasdaq’s options exchanges, is pursuing its own rule change that would raise the contract position limit for BlackRock’s iShares Bitcoin Trust to 1 million contracts. According to an SEC notice dated February 27, that proposal remains under review and has not yet been approved. The outcome of that filing could further expand trading capacity for one of the most actively traded Bitcoin ETF options on the market.
Originally reported by CoinTelegraph.
