The New York Stock Exchange (NYSE) American has proposed a rule change to list options for three Ether exchange-traded funds (ETFs) managed by Grayscale and Bitwise. This proposal, filed with the Securities and Exchange Commission (SEC) on August 7, aims to include options for the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Mini (ETH).
NYSE American believes that adding options trading for these Ether ETFs will benefit investors by offering a cost-effective way to gain more exposure to Ether. They also see options trading as a useful tool for investors who want to hedge their ETH investments and manage their positions more effectively.
The SEC will accept comments on this proposal for the next 21 days. If approved, this rule change would apply specifically to these Grayscale and Bitwise Ether ETFs, which are the only spot Ether funds listed on the NYSE American exchange.
This move by NYSE American comes shortly after the Nasdaq options exchange also requested SEC approval for options trading on the BlackRock iShares Ethereum Trust (ETHA) on August 6. Nasdaq’s request is similarly focused on BlackRock’s fund, the only Ether ETF on Nasdaq.
Both exchanges might face a long wait for SEC approval, as the regulatory body has not yet approved options trading for spot Bitcoin ETFs. Despite Bitcoin ETFs launching in January with around $50 billion in assets, the SEC has been cautious.
Options trading is important for hedge funds and financial planners as it helps manage risks from market volatility. This is especially relevant given Ether’s recent 28% price drop on August 5. Options are also used in more complex investment strategies, like the “covered strangle” approach promoted by 10x Research.
On August 7, the Ethereum spot ETF market saw significant outflows, totaling $23.68 million. The Grayscale Ethereum Trust (ETHE) alone experienced a major outflow of $31.86 million, indicating a large withdrawal by investors. However, the Fidelity Ethereum ETF (FETH) attracted $4.70 million in new investments.
Despite these changes, the total net asset value (NAV) of Ethereum spot ETFs remains strong at $6.63 billion. BlackRock’s iShares Ethereum Trust (ETHA) has been performing particularly well, with $900 million in inflows since its launch on July 23, making it one of the top-performing ETFs of 2024.
