The exchange has seen ongoing increases in demand for IBIT, prompting the request for higher limits.
Bitcoin News
The Nasdaq International Securities Exchange filed a proposal with the SEC on Nov. 13 to increase position limits for options on BlackRock's iShares Bitcoin Trust to 1 million contracts. The current limit stands at 250,000 contracts for the ETF known as IBIT.
Position limits prevent any single investor from controlling too many option contracts on the same stock. The mechanism reduces the risk of manipulative schemes that could affect prices, according to the SEC filing notice on Wednesday.
The exchange has seen ongoing increases in demand for IBIT, prompting the request for higher limits. A lower limit would impede trading activity and investor strategies such as effective hedging vehicles or income-generating approaches.
Vincent Liu, chief investment officer at quantitative trading firm Kronos Research, told reporters the SEC is likely to approve the proposal. These adjustments are routine once an asset proves it can handle real volume, he said. Thicker order books, tighter spreads, and a more efficient options market are expected if approved.
Super-sizing IBIT option limits represents a straight win for liquidity, allowing bigger traders to let real size flow without friction. More depth, tighter spreads, and cleaner markets follow when constraints come off, Liu added.
Nasdaq previously filed to raise the limit from 25,000 to 250,000 in January because IBIT was well above the trading volume minimum of 100 million shares. Liu stated the current push to super-size IBIT option limits shows Bitcoin markets are breaking out of their training wheels.
“Bigger bands mean bigger players can finally hedge, size up, and sharpen price discovery. A clear sign that crypto derivatives are shifting from niche to necessary,” he explained. “Higher limits will spark a short-term pop in volatility, with more room to warehouse risk and hedge cleanly.”
“Liquidity stops gapping and starts acting like a true institutional venue with calmer books, better fills, and flow that compounds instead of fragments,” Liu said.
Adam Livingston, a Bitcoin analyst and author, stated in X posts on Wednesday that the move by Nasdaq places BlackRock's Bitcoin ETF into the same category as the largest, most liquid equities on Earth. Tech giants Apple and Microsoft share this classification with the cryptocurrency fund.
“The market has already decided Bitcoin is a mega-cap asset, whether Washington likes it or not,” Livingston said. “This is the moment every banker secretly feared, where Bitcoin stops being a weird decentralized experiment and becomes a fully weaponized regulated asset class with institutional-grade derivatives depth. You don't scale options by 40x unless you know demand is about to detonate,” he added.
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