The New York Stock Exchange's options platforms, NYSE Arca and NYSE American, have completed an industry-wide move by filing rule changes with the Securities and Exchange Commission (SEC) to remove the 25,000-contract position and exercise limits on options tied to spot Bitcoin and Ether exchange-traded funds (ETFs). The SEC waived the standard 30-day waiting period, making the changes effective immediately upon filing.
The rule changes apply to options on 11 crypto ETF products, including BlackRock's iShares Bitcoin Trust (IBIT), Fidelity's Wise Origin Bitcoin Fund (FBTC), ARK 21Shares Bitcoin ETF (ARKB), Grayscale's Bitcoin Trust (GBTC) and Ethereum Trust (ETHE), and Bitwise's Bitcoin and Ethereum ETFs. The filings also eliminate restrictions that previously prevented these products from trading as FLEX options, which allow for customizable contract terms like non-standard strike prices and expiration dates.
Position limits for these options will now be governed by each exchange's standard framework, which sets limits based on trading volume and shares outstanding. Under these rules, options on large, liquid ETFs can qualify for position limits of 250,000 contracts or more. The 25,000-contract cap was initially implemented as a precautionary measure when crypto ETF options first launched in November 2024, with analysts at the time calling it conservative.
The shift to remove the caps began earlier this year, with Nasdaq ISE, Nasdaq PHLX, MIAX, MEMX, and Cboe all filing similar proposals. With the NYSE filings, every major U.S. options exchange has now completed the transition. The SEC noted the proposals do not raise novel regulatory issues, pointing to identical changes already in effect at rival exchanges.
This development is particularly significant for institutional market participants. Removing position caps enables more efficient hedging strategies, basis trades, and overlay programs. Access to FLEX options allows institutions to negotiate bespoke contract terms for structured products, a feature already available for comparable commodity ETFs like the SPDR Gold Trust (GLD).
Separately, Nasdaq ISE has a pending proposal to raise IBIT-specific options position limits to 1 million contracts, which the SEC is still reviewing. The comment period for the NYSE filings closes on April 13.
