Nasdaq Seeks SEC Approval for Looser Crypto Derivatives Limits

Nasdaq has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to relax position limits on options tied to spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs).

The current 25,000-contract cap would be eliminated, allowing for larger options positions tied to ETFs issued by firms including BlackRock, Fidelity, Ark Invest, VanEck, Grayscale, and Bitwise.

Nasdaq argues that the existing limits were introduced when crypto ETFs were new and untested, but market conditions have since evolved. Trading volumes, assets under management, and price discovery in the underlying ETFs have reached levels that support larger and more sophisticated options activity.

The proposal challenges the SEC's distinction between spot Bitcoin and Ethereum ETFs and derivatives tied to those products. Nasdaq argues that oversight mechanisms, including surveillance-sharing agreements and clearinghouse risk management, are already sufficient.