Nasdaq has filed a rule change proposal with the U.S. Securities and Exchange Commission (SEC) to eliminate position and exercise limits on options tied to spot Bitcoin and Ether exchange-traded funds (ETFs), potentially reshaping the crypto derivatives market if fully approved. The change, filed on January 7, 2026, and made effective immediately after the SEC waived its standard 30-day waiting period, removes the existing 25,000-contract cap on options related to major crypto ETFs listed on Nasdaq. The proposal now enters a public comment period, with a final SEC determination expected by late February unless the rule is suspended for review.
The rule change affects options on Bitcoin and Ethereum ETFs from issuers including BlackRock, Fidelity, Bitwise, Grayscale, ARK/21Shares and VanEck, among others. Position and exercise limits are regulatory safeguards designed to prevent excessive concentration, speculation and potential market manipulation. By eliminating these caps, Nasdaq argued the move would allow crypto ETF options to be treated “in the same manner as all other options that qualify for listing,” aligning digital asset derivatives with the broader commodity and ETF options market without compromising investor protections.
Options are contracts that give traders the right, but not the obligation, to buy or sell an underlying asset at a set price before a specified expiration date. Exchanges typically impose limits on the number of contracts a single trader can hold to reduce systemic risk. The previous 25,000-contract cap was specific to Bitcoin and Ether ETF options, even as the underlying ETFs themselves have no position limits. Removing the caps could enhance market liquidity and flexibility, particularly for institutional participants that use options for hedging strategies or large-scale exposure management.
The immediate effectiveness of the rule change, pending final approval, depicts evolving regulatory attitudes toward cryptocurrency-linked products. The SEC retains authority to suspend or revise the rule within 60 days if concerns arise during the public comment period. Nasdaq has been steadily expanding its involvement in crypto markets, including previous initiatives to raise position limits on options for Bitcoin ETF products and efforts to standardise treatment of digital assets alongside traditional financial instruments.
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