TLDR
- Nasdaq has filed a proposal to increase the option position limits for BlackRock’s IBIT ETF to 1 million contracts.
- The current limit of 250,000 contracts may restrict trading strategies and hinder institutional participation.
- Nasdaq cited consistent growth in IBIT trading volume as the main reason for requesting a higher limit.
- Vincent Liu from Kronos Research said the SEC usually approves such changes once assets show strong trading volume.
- Liu stated that larger limits would improve market liquidity and allow cleaner execution for institutional traders.
Nasdaq has submitted a proposal to the U.S. Securities and Exchange Commission to raise position limits on BlackRock’s iShares Bitcoin Trust (IBIT) options. The exchange wants to increase the cap from 250,000 contracts to 1 million due to growing demand. This move follows a steady rise in trading activity around BlackRock’s Bitcoin ETF since its debut.
Nasdaq files proposal to quadruple IBIT options cap
Nasdaq filed the proposal with the SEC on November 13, seeking to boost investor flexibility in trading BlackRock’s IBIT options. According to the filing, the exchange wants the higher limit to support trading strategies that require larger hedging positions. The current 250,000-contract limit may restrict large traders who need greater exposure.
The proposal cites increased liquidity and volume in IBIT as reasons to expand the current cap. BlackRock’s ETF continues to attract strong market participation, crossing important volume thresholds. Nasdaq stated that limiting growth would impair options trading efficiency and investor access.
Position limits are regulatory safeguards aimed at preventing market manipulation through concentrated holdings. Yet Nasdaq said IBIT now qualifies for the same treatment as high-volume equities. The SEC is currently reviewing the proposal, and no decision has been announced.
Trading firms expect better liquidity if limit expands
Vincent Liu, Chief Investment Officer at Kronos Research, told Cointelegraph the SEC likely approves such changes once volume metrics are met. “These adjustments are routine once an asset proves it can handle real volume,” Liu explained. He predicted the move would tighten spreads and improve market efficiency.
According to Liu, expanding IBIT limits gives institutional players more room to hedge and trade large positions smoothly. “Super-sizing IBIT option limits is a straight win for liquidity,” Liu stated in an interview. He added that deeper markets and cleaner execution follow when constraints are lifted.
Liu also noted that volatility may spike briefly once the new cap is in place. However, over time, markets typically adjust to the added depth. He emphasized that BlackRock’s ETF now supports institutional-grade derivatives trading conditions.
BlackRock ETF joins ranks of mega-cap equity products
Bitcoin analyst Adam Livingston commented on X that Nasdaq’s request puts BlackRock’s Bitcoin ETF in line with major equities. He said BlackRock now trades with the largest and most liquid securities like Apple and Microsoft. “This is the moment every banker secretly feared,” Livingston posted.
Livingston noted that the market has already priced Bitcoin as a mega-cap asset. Nasdaq’s move, he argued, simply recognizes what traders already accept. The proposal allows regulated scaling of derivatives aligned with investor appetite.
He said, “You don’t scale options by 40× unless you know demand is about to detonate.” Livingston emphasized that this transition marks Bitcoin’s entry into institutional financial structures. BlackRock’s IBIT now reflects a shift from experimental to mainstream asset status.
IBIT’s trading volume supports higher option limits
Earlier this year, Nasdaq increased the limit from 25,000 to 250,000 contracts due to rising interest in BlackRock’s IBIT. The ETF’s trading volume had exceeded 100 million shares, qualifying it for higher option thresholds. Nasdaq used this data in its current argument to the SEC.
According to Nasdaq, limiting contracts now would stall market growth and block advanced strategies. BlackRock’s ETF continues to meet criteria used for other top-tier equity products. The exchange argues that IBIT’s metrics warrant parity with those instruments.
The SEC has not given a final timeline for reviewing the latest proposal. If approved, BlackRock’s IBIT will see its options capacity rise fourfold. This would mark another regulatory shift in support of large-scale crypto-based investment vehicles.
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