The U.S. Securities and Exchange Commission (SEC) has given its approval for new stock exchange rule modifications that facilitate the listing of options tied to spot Bitcoin ETFs. This approval represents a significant expansion in the investment tools available for assets that have already attracted billions in inflows this year.

As per two official memos from the SEC released Friday, NYSE has been authorized to list and negotiate options related to:

• Grayscale Bitcoin Trust (GBTC)
• Grayscale Bitcoin Mini Trust (BTC)
• Bitwise Bitcoin ETF (BITB)
  Meanwhile, Cboe Global Markets received the green light to introduce options for:
• Fidelity Wise Origin Bitcoin Fund (FBTC)
• ARK 21Shares Bitcoin ETF (ARKB)

This recent approval follows the earlier authorization of Nasdaq’s proposal by the SEC, which allows trading of options on BlackRock’s iShares Bitcoin Trust (IBIT).

Options function as derivatives that grant the holder the right, but not the obligation, to buy or sell an underlying asset—here, Bitcoin ETFs—at a predetermined price on or before a specified date. Many market participants believe that Bitcoin ETF options trading might enhance institutional interest and increase liquidity in the cryptocurrency market.

In the NYSE’s endorsement, the SEC expressed its belief that the introduction of these options would allow for better hedging, increase liquidity, improve price efficiency, and reduce volatility concerning the underlying funds, thereby enhancing market transparency and efficiency.