SEC raises BlackRock Bitcoin ETF options limit fourfold to 1 million

The U.S. Securities and Exchange Commission approved a NYSE Arca rule raising position and exercise limits for options on BlackRock's iShares Bitcoin Trust to 1 million contracts, a fourfold increase from the prior 250,000 cap.

"The proposal raises no new legal or regulatory issues," the SEC said in its July 15 notice, citing comparable limits already adopted at Nasdaq ISE, Nasdaq PHLX, and BOX Exchange.

NYSE Arca filed the proposal July 6 under Exchange Act Section 19(b)(1), amending Rule 6.8-O. The SEC waived the standard 30-day operative delay, making the rule effective upon filing. IBIT held $47.20 billion in net assets as of July 14, with a 30-day average volume of 46.5 million shares, according to BlackRock's product page. The new limit represents 7.474% of outstanding IBIT shares and 0.278% of all Bitcoin outstanding, per exchange methodology.

The expanded cap allows larger institutional traders to hedge bigger Bitcoin ETF positions and execute more complex options strategies, deepening the regulated derivatives market around digital assets. The SEC retains authority to suspend the rule within 60 days on public-interest or investor-protection grounds.

The approval follows the SEC's April 27 order greenlighting Nasdaq ISE's matching proposal, which also raised IBIT limits to 1 million contracts per market side. Nasdaq PHLX and BOX Exchange filed substantially identical terms in May, creating a uniform standard across competing options venues.

NYSE Arca argued the former limit constrained larger hedging and income-producing strategies and limited market makers' ability to provide tighter spreads. The exchange based its case on IBIT's trading depth, citing Nasdaq ISE data that valued the fund at $52.66 billion on Feb. 11, with 61.8 million shares in six-month average daily volume and 1.338 billion shares outstanding.

Position limits cap contracts held on one market side, while exercise limits restrict contracts exercised within five consecutive business days. The rule targets concentration risk rather than ordinary trading volume. Existing surveillance and large-position reporting rules remain in place, requiring firms to report positions of 200 contracts or more in one options class.

The SEC's decision signals growing regulatory comfort with Bitcoin ETF options as a maturing market infrastructure. IBIT, which tracks Bitcoin after fees and liabilities, remains outside the Investment Company Act of 1940 and lacks some protections applying to registered funds. The larger options cap does not alter the fund's holdings, fee structure, or redemption mechanics.

Interested parties may submit comments under file number SR-NYSEARCA-2026-76 within 21 days of Federal Register publication. The SEC may review submissions or suspend the rule during its 60-day oversight window.

This article is for informational purposes only and does not constitute investment advice.