IBIT options trading volume surges to $446M in opening hours, $1.6B by mid-day

Choices buying and selling for BlackRock’s exchange-traded fund (ETF), iShares Bitcoin Belief ETF (IBIT), started on November 19 on Nasdaq and has already moved greater than $446 million in its first few hours of buying and selling.

Bloomberg senior ETF analyst Eric Balchunas famous that the quantity is “a ton” for the primary day, with virtually 98% of buying and selling contracts being name contracts. He added:

“Appears very bullish, particularly the December 20 C100, which is principally the value of Bitcoin [Bitcoin] will double within the subsequent month.”

A “name” in an choices contract offers the best to buy a safety at a predetermined worth, often known as the strike worth, inside a particular time frame, known as the expiration date.

IBIT’s spot buying and selling quantity on the time of writing was $1.6 billion, based mostly on Barchart facts.

There’s extra to return

The addition of choices buying and selling to IBIT got here quickly after the Workplace of the Comptroller of the forex’s (OCC) Nov. 18 memo saying it was “getting ready for clearance, settlement and danger administration.”

The approval offers the inexperienced gentle to choices buying and selling for IBIT and different spot Bitcoin ETFs pointed out by Bloomberg ETF analyst James Seyffart, who expects extra listings of those merchandise this week.

Bitwise CEO Hunter Horsley anticipated Choices buying and selling on the corporate’s BITB begins on November 20.

‘Uncommon market dynamics’

Balchunas beforehand mentioned the choices record for spot Bitcoin ETFs is a optimistic improvement because it offers conventional traders extra instruments and attracts extra liquidity from “massive fish.”

Nonetheless, Jeffrey Park, head of alpha methods at Bitwise, says declared that Bitcoin nonetheless will get particular therapy for buying and selling. He identified that IBIT solely has 25,000 contracts as an accepted place restrict, which represents simply 0.5% of the ETF’s shares.

An choices contract restrict limits the variety of contracts that may be held on the identical facet of the market. The restrict varies per ETF based mostly on the variety of shares excellent and buying and selling quantity.

In line with Park, IBIT ought to have been eligible for 400,000 possibility contracts, which might have reached solely 7% of the excellent shares. He additionally compares IBIT’s restrict to the two,000 contract restrict of CME Bitcoin futures contracts, which equates to 175,000 contracts for IBIT.

Park added:

“Whereas I am thrilled that we have crossed the end line – particularly in 2024 – it is arduous to disregard the continued particular therapy that Bitcoin continues to obtain. I lengthy for the day when Bitcoin is not marked with an asterisk.”

He defined that the 25,000 contract restrict may create “uncommon market dynamics” and suggested retail merchants to discover arbitrage alternatives that would come up on account of Bitcoin ETF choices.

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