Nasdaq has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to raise the position and exercise limits for options on BlackRock’s iShares Bitcoin Trust (IBIT) from 250,000 to 1,000,000 contracts.
If approved, the change would move IBIT options into the top tier of exchange-traded products. This would align Bitcoin ETF options with some of the most liquid equity and index options in traditional markets.
A 1,000,000 contract cap, based on the exchange’s calculations, would translate to about 7.4% of IBIT’s outstanding shares. Given the ETF’s creation/redemption mechanism and the size of the broader Bitcoin market, ISE considers this amount manageable.
Why Nasdaq Wants a Higher Options Limit for IBIT
According to the petition, the proposed limitations would align IBIT with significant exchange-traded funds (ETFs) that now have 1,000,000-contract ceilings. These include the iShares MSCI Emerging Markets ETF, iShares China Large-Cap ETF, and iShares MSCI EAFE ETF.
Nasdaq ISE contends that raising the limit would allow institutional traders and market makers to run larger hedging and arbitrage strategies tied to IBIT without repeatedly hitting regulatory caps.
At the same time, it would improve market depth and narrow bid-ask spreads by allowing liquidity providers to take on more risk. It will also better reflect the trading reality of IBIT, whose options volumes and open interest have grown rapidly in 2025 amid escalating institutional interest in Bitcoin ETF derivatives.
The exchange cites data showing that, even at 250,000 contracts, the theoretical risk to the underlying Bitcoin market is minimal, amounting to a fraction of 1% of the total circulating supply. It also points to comparable or higher limits in Commodity Futures Trading Commission (CFTC)-regulated Bitcoin futures on CME Group, arguing that a higher ETF options cap is consistent with broader derivatives market practice.
Regulators must now weigh these arguments against concerns about potential market manipulation or excessive concentration of positions. The SEC’s review process includes a public comment period, after which the commission can approve, modify, or reject the proposal.
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