24/7 Cryptocurrency News

US SEC Approves Options Trading For Ethereum Spot ETFs

After nearly nine months since the initial filing by Nasdaq, the US SEC has approved options trading for Ethereum spot ETFs.
Published by
US SEC Approves Options Trading For Ethereum Spot ETFs

Highlights

  • US SEC has approved options trading for Ethereum spot ETFs.
  • The approval come in the form of a rule change for the iShares Ethereum Trust.
  • A previous rule change saw the approval of staking on Fidelity's Ethereum ETF

After a series of regulatory back-and-forth, the US Securities and Exchange Commission (SEC) has approved options trading for an Ethereum spot exchange-traded fund (ETF). The Ethereum spot ETFs will offer investors leverage with limited capital while serving as a hedging vehicle to protect against price drops.

Advertisement

US SEC Issues Thumbs Up For Options Trading On Ethereum Spot ETFs

The US SEC has approved Nasdaq’s application for a rule amendment on the iShares Ethereum Trust (ETHA) to allow options trading. According to a press release, Nasdaq can list and trade options on the shares of the Ethereum spot ETF following the rule change.

Per the announcement, Nasdaq says the options will provide investors with a low-cost investing tool for exposure to ETH. The options will be settled using American-style exercise while operating in the same manner as traditional ETFs.

Flowing from the approvals, investors will be able to hedge risks via puts as a layer of protection against ETH price drops. Furthermore, the rule change will offer low-cost exposure to ETH via calls compared to outright ETF purchases. Investors will have the option to sell covered calls for passive income during low volatility.

Aware of the possibilities of manipulation, Nasdaq limits the Ethereum spot ETFs’ trust and exercise limit to 25,000 contracts. The SEC’s approvals extend to Bitwise Ethereum ETF (ETHW), Fidelity Ethereum Fund (FETH), and the Grayscale Ethereum Trust (ETHE).

The US SEC has previously approved staking on Fidelity’s ETH ETF, underscoring changing stances by the securities regulator. The SEC has also ruled that dollar-backed stablecoins are not securities extending the same decision to memecoins and PoW mining tokens

Advertisement

SEC Says Options Trading Amendment Adheres To Securities Law

The SEC’s regulatory horse trading with Nasdaq ended with the securities regulator approving the proposed amendments. The Commission notes that the proposal for options trading is in line with section 6(b)(5) of the Securities Act preventing fraudulent acts.

For starters, the SEC is satisfied that the security underlying the options is widely held and actively traded. Furthermore, the SEC agrees with Nasdaq’s position and exercise limit of 25,000 contracts as an additional layer of protection against manipulation for the Ethereum spot ETF.

While the SEC is aware of the dangers of exposing retail traders to options given steep price drops, it notes that existing rules on broker-dealer conduct will apply in addition to FINRA’s rules. The underlying asset has suffered a massive decline in recent weeks with ETH hanging to $1,500 after a double-digit drawdown in 7 days.

The SEC still has a mountain of paperwork on its desk following the latest options trading approval. Several XRP spot ETFs are waiting for approval from the securities watchdog with Nate Geraci saying it is only a matter of time.

Advertisement

Share
Aliyu Pokima

Aliyu Pokima is a seasoned cryptocurrency and emerging technologies journalist with a knack for covering needle-moving stories in the space. Aliyu delivers breaking news stories, regulatory updates, and insightful analysis with depth and precision. When he's not poring over charts or following leads, Aliyu enjoys playing the bass guitar, lifting weights and running marathons.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • 24/7 Cryptocurrency News

ASTER Deposits Flows Into Binance Wallets Following CZ Endorsement, Listing Incoming?

In a fresh development, multiple ASTER tokens have been sent to Binance spot wallets, following…

October 2, 2025
  • 24/7 Cryptocurrency News

Avalanche Treasury Seals $675M Deal With Mountain Lake to Build $1B AVAX Vehicle

Avalanche Treasury Co., in partnership with Mountain Lake Acquisition Corp., has unveiled a $675 million…

October 2, 2025
  • 24/7 Cryptocurrency News

Just In: Nasdaq-Listed VivoPower Raises $19M in Equity to Expand XRP Treasury Holdings

Nasdaq-listed VivoPower has stepped up its digital treasury goals with a fresh capital raise aimed…

October 2, 2025
  • 24/7 Cryptocurrency News

Solana Price Rallies 5% as Nasdaq-listed VisionSys Launches $2B SOL Treasury Strategy

Solana increased in price by 5% to approximately $219 following a $2 billion Solana treasury…

October 2, 2025
  • 24/7 Cryptocurrency News

XRP Ledger Rolls Out MPT Standard for Real-World Asset Tokenization

The XRP Ledger (XRPL) has launched the Multi-Purpose Token (MPT) standard, designed to simplify and…

October 1, 2025
  • 24/7 Cryptocurrency News

SEC Puts Crypto ETF Approvals On Hold Following U.S. Government Shutdown

The U.S. Securities and Exchange Commission has announced plans to streamline its operations amid the…

October 1, 2025