Crypto ETF Options Arrive in US Market, Changing Trader Behavior

Options on cryptocurrency exchange-traded funds (ETFs) have changed how institutional and retail traders interact with the crypto market. In late 2024, options on spot Bitcoin ETFs arrived in the United States, giving traders a new way to buy calls and puts on Bitcoin exposure.

This guide explains what these options are, how they're priced, and the strategies traders use. Options work by giving the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a specific date.

The two types of options are call options and put options. Call options give the buyer the right to buy the underlying asset, while put options give the buyer the right to sell the underlying asset. The Options Clearing Corporation (OCC) clears all of these contracts, providing the same counterparty guarantee that backs every listed option in the US market.

The SEC approved spot Bitcoin ETFs in January 2024 but did not approve options on those ETFs until October 2024. This delay reflected concerns about market manipulation, position limits, and the interaction between spot crypto markets (which trade 24/7) and options markets (which trade during US exchange hours).

The volume numbers tell the adoption story. IBIT options regularly rank among the top 10 most actively traded option contracts in the entire US market, alongside options on SPY, QQQ, and AAPL.