Options trading in %Bitcoin (CRYPTO: $BTC) exchange-traded funds (ETFs) is off to a strong start.
Market data shows that options trading related to the %BlackRock (NYSE: $BLK) spot Bitcoin ETF, known as the iShares Bitcoin Trust ETF (NASDAQ: $IBIT), attracted $2 billion U.S. of capital in its first day on the %Nasdaq (NASDAQ: $NDAQ) exchange.
Some analysts have called the options action in the spot Bitcoin ETF “unheard of.”
The iShares Bitcoin Trust became the first spot crypto ETF in the U.S. to enable options trading on Nov. 19.
The move has already attracted huge interest and capital from institutional investors that are betting on the future direction of Bitcoin’s price.
In September, the U.S. Securities and Exchange Commission (SEC) approved options trading for a dozen spot Bitcoin ETFs that are available in America across several different exchanges.
Nasdaq has now allowed options trading for spot Bitcoin ETFs on its exchange. Currently, IBIT is the only spot Bitcoin ETF that trades on the Nasdaq.
But other exchanges are expected to also allow options trading tied to spot Bitcoin ETFs by year’s end.
Options are financial derivatives that provide the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date.
A “call” option is a bullish bet that an assets price, such as a spot Bitcoin ETF, will rise within a set period of time. A “put” option is a bearish bet that assumes an asset’s price will decline.
Options trading is used by professional traders and institutional investors to bet on the future direction of the market and deliver outsized gains.
News of the strong options debut comes as the price of Bitcoin rose to an all-time high of just over $94,000 U.S. in the past 24 hours. Bitcoin has now gained 112% this year.