Grayscale, Bitwise, NYSE American apply to list options on 3 Ether ETFs

The New York Stock Exchange (NYSE) American LLC has proposed a rule change that will allow it to list and trade options for three Ether exchange-traded funds operated by crypto asset managers Grayscale and Bitwise.

In an Aug. 7 filing to the Securities and Exchange Commission, the NYSE American asked the SEC to “permit the listing and trading of options” for the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE) and the Grayscale Ethereum Mini (ETH).

NYSE American said that allowing the trading of options on the three Ether (ETH) ETFs would benefit investors by providing a low-cost investment tool for gaining additional exposure to Ether.

Additionally, the filing said introducing options trading would offer investors a hedging mechanism to meet investment needs regarding ETH products and positions.

Comments on the proposal are expected to be submitted within the next 21 days.

Notably, NYSE American’s request for rule change would apply solely to Grayscale and Bitwise, the only spot Ether funds listed on its exchange.

NYSE American’s request comes just one day after the Nasdaq options exchange asked the SEC to allow options trading on the BlackRock iShares Ethereum Trust (ETHA).

Just like NYSE American’s proposed rule change, Nasdaq’s Aug. 6 request for ETH ETF options would apply exclusively to BlackRock’s fund, which is currently the only Ether ETF listed on the Nasdaq.

Stock exchanges shouldn’t hold their breath for ETH ETF options

Both NYSE American and Nasdaq may be waiting a while for the SEC to approve their request, as the regulator has still not yet authorized options trading on spot Bitcoin (BTC) ETFs, which launched in January and now command approximately $50 billion in assets under management.

In July, the SEC told the half dozen options exchanges — including Nasdaq — that had asked to list options on spot BTC ETFs that more time was needed to make a decision.

Options are widely used by hedge funds and financial planners alike to safeguard against sharp market movements — like the 28% drop in Ether’s spot price on Aug. 5.

They also form the basis of more exotic strategies, such as the “covered strangle” touted by 10x Research, an investment research firm.