Cboe unveils cash-settled spot Bitcoin options tied to ETF index

The new options product will begin trading on Dec. 2.

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Cboe Global Markets is set to launch the first cash-settled options tied to the price of spot Bitcoin (BTC), with trading set to begin on Dec. 2, according to a Nov. 22 press release.

These options will be based on the Cboe Bitcoin Us ETF Index (CBTX), designed to reflect the performance of spot Bitcoin ETFs listed on US exchanges.

The landmark product aims to provide investors with exposure to spot Bitcoin price movements without directly holding the crypto. The launch comes days after US regulators gave Bitcoin options the final greenlight earlier this month.

The launch includes standard and mini index options, along with customizable FLEX options, offering a range of tools to capitalize on price movements, manage risk, and express market views.

Approach to Bitcoin Options

The Cboe Bitcoin US ETF Index is the first of its kind in the US. It leverages a modified market cap-weighted approach to track the performance of spot Bitcoin ETFs. By mirroring spot Bitcoin price trends, the index offers a representative measure of the asset.

The options will feature cash settlement, ensuring positions are closed in cash at expiration, removing the complexities of Bitcoin ETF delivery. Additionally, the European-style exercise mechanism allows options to be executed only on the expiration date, minimizing early assignment risks.

Mini options, under the ticker MBTX, will be available at 1/10th the notional value of the standard index options, appealing to portfolios of varying sizes and offering flexibility for smaller traders.

FLEX options will provide customization for exercise prices, styles, and expiration dates, catering to sophisticated trading strategies.

Expanding into digital assets

The introduction of these Bitcoin options aligns with Cboe’s broader strategy to enhance its digital asset derivatives portfolio.

The exchange already supports Bitcoin and Ethereum margin futures on its digital platform. Pending regulatory approval, these futures are expected to transition to the Cboe Futures Exchange in 2025.

Adam Inzirillo, Global Head of Data and Access Solutions at Cboe, said:

“This launch underscores the strength of Cboe’s ecosystem, integrating data, indices, and innovative products to meet diverse investor needs.”

Cboe remains at the forefront of digital asset market evolution, listing the majority of US spot Bitcoin and Ethereum ETFs.

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