“We believe that the utility of the options, what they provide to the end investor in terms of downside protection and risk-defined exposure to Bitcoin, would really help the end investor and the ecosystem,” the firm's global head of derivatives told CNBC. ETF Edge” this week.
Cboe, the largest U.S. options exchange, filed with the SEC on Jan. 5 to offer options related to Bitcoin exchange-traded products. According to the press release, the company expects trading of these options to begin later this year.
According to Dave Nadig, financial futurist at VettaFi, crypto fund options could be attractive to institutional investors who have previously been reluctant to invest in the digital asset class.
“You're going to start seeing all sorts of hedge fund players in this space,” he said in the same interview. “People who may not have traditionally speculated on crypto directly in the crypto ecosystem will now have something to play with.”
Nadig also suggested that zero-day options – contracts that expire on the same day they are traded, commonly known as “0DTEs” – would be the ultimate target for Bitcoin derivative products.
“If what is happening with Bitcoin is what is happening with individual stocks, we will see retail in particular and many institutions moving towards zero days to expiry options trading on Bitcoin itself,” said he.
Still, Cboe's Clay warned that these products could still be a long way off.
“We still haven’t even gotten approval to list options, so let’s not rush into thinking about 0DTEs,” she said. “We want to get options on these ETFs in a very intelligent and thoughtful way that actually…really builds the ecosystem of new market entrants.”