Nasdaq ISE Files to Lift BlackRock IBIT Option Limits Into Top Tier Status

IBIT +2.97% BLK +1.00% BTC-USD -0.04%

Nasdaq ISE has filed a proposal with the Securities and Exchange Commission (SEC) to expand the trading capacity of options tied to BlackRock’s iShares Bitcoin Trust ETF, IBIT, in a move that highlights how quickly bitcoin linked products are being pulled into the institutional mainstream.

In a Federal Register notice, the exchange requested that position and exercise limits for IBIT options be raised from the current 250,000 contracts per side to one million contracts, placing the product in the same liquidity tier as major global equity benchmarks such as iShares MSCI Emerging Markets (EEM) and iShares China Large-Cap ETF (FXI).

ISE said IBIT has posted strong and accelerating options volume throughout 2025, and that the existing ceiling now restricts market makers and institutional desks that rely on options for hedging and yield strategies.

"The Exchange expects continued options volume growth in IBIT as opportunities for investors to participate in the options markets increase and evolve", it stated on the filing.

The filing includes detailed analysis comparing IBIT’s market capitalization, average daily volume and liquidity to ETFs that already support one million contract limits. The exchange also noted that even a fully exercised one million contract position would equal about 7.5% of IBIT’s float, and only 0.284% of all bitcoin in existence, a scale it argues poses little risk of market disruption.

A second part of the proposal: ISE is seeking to remove position and exercise limits for physically settled FLEX IBIT options, aligning them with commodity based ETFs like SPDR Gold Trust (GLD). FLEX contracts are widely used by large funds for custom hedges and structured exposures.

The proposal arrives as BlackRock’s IBIT has become the largest venue for bitcoin options open interest, surpassing Deribit.

The SEC is now soliciting public comment on the rule change.