SEC Approves Options Trading on Ethereum Spot ETFs

Highlights:

• The SEC has approved options trading for Ethereum spot ETFs in the market.
• Nasdaq will offer options with contract limits to help reduce market risks.
• More crypto ETF applications are under review and may be approved in the near future.

The United States Securities and Exchange Commission has approved options trading for several Ethereum spot exchange-traded funds. The approval includes BlackRock’s iShares Ethereum Trust, Grayscale’s Ethereum Trust and Mini Trust, Fidelity’s Ethereum Fund, and Bitwise Ethereum ETF. These ETFs allow investors to gain exposure to Ethereum without actually having to buy or store the actual asset. Now, with options trading available, investors can use new strategies to manage risk and respond to price changes.

JUST IN: SEC approves options trading on spot Ethereum ETFs. pic.twitter.com/OJ8ug1Qhwl

— Crypto India (@CryptooIndia) April 10, 2025

Options give the holder the right to buy or sell an asset at a set price before a specific date. This offers a way to participate in price movement without making a full investment. Because of this, options attract both institutional and retail traders. With the SEC’s decision, Ethereum ETFs will now have the same trading features already available to Bitcoin ETFs.

Following this approval, exchanges such as Nasdaq can list and trade options linked to Ethereum ETFs. According to filings, these options will follow the American-style exercise method. This means investors can exercise the option at any time before the expiration date. The trading process will be similar to that of traditional ETF options, which makes the transition smooth for experienced traders.

Limits and Oversight Measures in Place

Nasdaq has introduced a position and exercise limit of 25,000 contracts for Ethereum ETF options. This limit aims to eliminate the chance of being manipulated and prevents exposure of the fund’s holdings under volatile conditions. The SEC confirmed that the Ethereum ETFs in question are widely held and actively traded. These factors support the move to expand trading tools for these funds.

Additionally, Nasdaq stated that the options will provide a low-cost entry into Ethereum investment. Investors can hedge against falling prices using put options. When the market is stable, they can also sell covered calls for income. These features enable investors to trade their positions efficiently without buying or selling the ETF itself.

The SEC confirmed that existing rules applicable to broker-dealer conduct will continue to apply. Moreover, FINRA oversight will continue. These are designed to offer protection to retail investors who may not be familiar with the risks involved in options trading. This is important as Ethereum has recently seen significant price changes.

Over the last week, ETH fell by more than 11% and dropped below $1,500. Meanwhile, ETH is trading at $1,618, an 11.24% increase in the past day. Its trading volume has increased by 32.47% to $34.55 billion. In addition, the market cap is up to $195.37 billion.

The SEC’s decision adds to other recent actions involving Ethereum-based products. It previously approved staking for Fidelity’s Ethereum ETF. It also stated that dollar-backed stablecoins and memecoins are not treated the same way as securities. These moves suggest changes in how digital assets are handled in financial markets.

More Crypto ETFs Await SEC Decisions

Several other cryptocurrency ETF proposals are still under review. Several asset managers are applying for funds linked to XRP, Solana, and Dogecoin. These applications follow the same model as Ethereum or Bitcoin ETFs.

Although Bitcoin ETFs have received significant inflows, Ethereum products have not experienced the same rate of growth. With the addition of options trading, more investors may start to venture into Ethereum-linked funds. More decisions could soon follow as the SEC continues to review pending applications.