SEC Approves Nasdaq Cash-Settled Bitcoin Index Options On PHLX Under Ticker QBTC

The U.S. Securities and Exchange Commission approved Nasdaq’s plan to list cash-settled Bitcoin index options on the Philadelphia Stock Exchange (PHLX), with the contracts trading under the ticker QBTC and tied to the Nasdaq Bitcoin Index.

The SEC approval, issued on an accelerated basis and published this week, covers European-style options that are cash-settled with no physical delivery of Bitcoin and no risk of early assignment.

Bitcoin News

The contracts are tied to the Nasdaq Bitcoin Index, which tracks one-hundredth of the CME CF Bitcoin Real Time Index and updates using aggregated data from major crypto venues roughly every 200 milliseconds.

The SEC order sets a minimum price increment of $0.01 and a per-side position limit of 24,000 contracts, which the SEC noted equates to roughly 0.12% of Bitcoin’s outstanding supply.

Trading remains contingent on the Commodity Futures Trading Commission granting exemptive relief due to Bitcoin’s commodity classification, creating a potential delay before QBTC contracts hit the market.

SEC approval came under Chairman Paul Atkins, and Bitcoin News said the green light was the final hurdle because the CFTC must grant exemptive relief before the Phlx can list and trade QBTC contracts.

Bitcoin News also said no timeline has been provided for that step, even as it described the product as European-style and cash-settled, with holders receiving the difference between the spot price and the strike price at expiration.

Coinpedia

Cointelegraph reported that despite the SEC green light, the options cannot begin trading until the Commodity Futures Trading Commission grants its own exemptive relief due to Bitcoin’s classification as a commodity, which falls under the CFTC’s jurisdiction.

Cointelegraph added that CME Group, which has offered Bitcoin futures options since 2020, filed a comment letter in October last year arguing the contracts fall under CFTC’s exclusive jurisdiction.

In its order, the SEC emphasized that Section 717 of the Dodd-Frank Act is not limited to “novel derivative products” and allows for concurrent jurisdiction between the SEC and CFTC when the latter grants exemptive relief.

The SEC framework specifies that QBTC options are cash-settled and European-style, meaning holders receive the difference between the Bitcoin spot price and the strike price at expiration, with no physical delivery of Bitcoin.

“Source: SEC The contracts will trade under the ticker QBTC on Phlx, with a minimum increment of $0”

Cointelegraph

MEXC said the product offers a distinct avenue to express views on Bitcoin’s price without holding actual BTC, contrasting it with instruments that involve custody and operational responsibilities associated with holding spot assets.

Yellow described the contracts as cash-settled, European-style options that settle gains and losses in dollars and can exercise only at expiration, while also noting that trading cannot begin right away because the contracts still need clearance from the Commodity Futures Trading Commission.

Crypto Briefing said the SEC approval lets Nasdaq PHLX list and trade European-style, cash-settled options on the Nasdaq Bitcoin Index under the ticker QBTC, with settlement prices determined by the CME CF Cryptocurrency Reference Rate, New York Variant (BRRNY).

Crypto Briefing also framed the main risk as regulatory fragmentation, warning that if the CFTC exemptions take longer than expected, or if jurisdictional disputes create uncertainty around the product’s status, trading could be delayed indefinitely.