NYSE Exchanges Remove Cap Limiting Crypto Options

Two New York Stock Exchange-affiliated exchanges have removed the 25,000 contract position limit on options tied to 11 crypto exchange-traded funds.

NYSE Arca and NYSE American each filed three rule changes in the Federal Register on March 10 to remove contract position limits and price discovery restrictions for options linked to Bitcoin (BTC) and Ether (ETH) ETFs listed on their exchanges.

These were acknowledged by the Securities and Exchange Commission on Sunday, with the SEC waiving the standard 30-day waiting period for both sets of proposed rule changes, meaning they are now in effect.

The limits were imposed when crypto ETF options first started trading in November 2024. Limits of this nature are typically imposed to prevent market manipulation and volatility. T

The removal of those limits now puts them closer to how other commodity ETF options are treated, and gives institutions greater trading flexibility while also potentially boosting liquidity and making it easier to enter and exit positions. 

It also allows the crypto options to be traded as FLEX options, which include customizable terms such as non-standard strike prices, expiration dates and exercise styles.

Related: Scaramucci says BTC’s 4-year cycle still in play, forecasts rise in Q4 

A total of 11 crypto ETF options are affected by the rule changes, including BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity’s Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB).

Bitcoin and Ether ETFs issued by Bitwise and Grayscale are also affected.