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Options on BlackRock’s popular iShares Bitcoin Trust ETF (IBIT) began trading on Nasdaq on Tuesday, ushering in a new way to trade and speculate on Bitcoin’s price.
Nasdaq told CNBC that IBIT traded 73,000 option contracts in the first 60 minutes of trading on Tuesday, moving the fund into the top 20 most active non-index options.
Options trading allows investors to play Bitcoin’s Notorious for volatility, they buy or sell assets based on a predetermined price that they expect the price to rise or fall in a given period.
“Bitcoin has an active derivatives market, but in the U.S. it remains small compared to other asset classes and is largely restricted to institutional players,” said economist and Cryptocurrency Now It’s macro,” said corresponding author Noel Acheson. “Deeper onshore derivatives markets will add to the growing market complexity. This will increase investor confidence in the asset, introduce new groups, while enabling more diverse investment and trading strategies… Among other things All things being equal, this should dampen volatility and downside.
The market for options contracts on the major ETFs is very active and widely used by more sophisticated traders. For example, over the past five business days, Interactive Brokers clients Invesco QQQ Trust (QQQ) and SDPR S&P 500 ETF Trust (SPY) According to brokerage data, it is more important than the fund itself.
Todd Sohn, ETF strategist at Strategas, said the launch of Bitcoin ETF options may also lead to the creation of new funds that include these options.
“Grayscale has filed for covered call (funds) and I’m sure BlackRock will file as well. And then we’ll get a buffer and then we’ll get any other trend following and I think the ecosystem is really going to start here. Fly,” Thorn said.
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