SEC Reviews Nasdaq Request to Expand BlackRock’s IBIT Options Limit

TLDR

• Nasdaq’s International Securities Exchange submitted a proposal to increase IBIT options limits to 1 million contracts.
• The proposal was filed with the U.S. Securities and Exchange Commission on November 21, 2025.
• BlackRock’s iShares Bitcoin Trust currently has a position limit of 250,000 contracts.
• The proposed change would place IBIT options alongside major equities like Apple and NVIDIA.
• Nasdaq aims to support institutional hedging and trading by expanding the position limit.

Nasdaq’s International Securities Exchange has proposed a rule change to the U.S. SEC to raise IBIT options limits. The filing aims to increase position limits on BlackRock’s iShares Bitcoin Trust options from 250,000 to 1,000,000 contracts. This adjustment would move IBIT options into the same category as Apple, NVIDIA, and SPDR S&P 500 ETF options.

SEC Receives Proposal to Expand IBIT Options Cap

The SEC received the proposal from Nasdaq ISE on November 21, 2025, requesting increased trading flexibility for IBIT options. The filing claims current limits are “restrictive and hamper legitimate trading and hedging strategies” for institutional participants. Raising limits to 1,000,000 contracts would open space for expanded hedging and structured product strategies on IBIT.

The proposal would align IBIT with other top-tier equities and ETFs based on liquidity and institutional trading demand. It states that IBIT averaged 44.6 million shares in daily trading volume as of September 22, 2025. IBIT also reached a market capitalization of $86.2 billion, reinforcing its eligibility for the new position limit tier.

A public comment period on the proposal remains open through December 17, 2025, pending SEC approval. If approved, the rule would allow market makers to deepen IBIT’s liquidity through higher open interest thresholds. The exchange also seeks to exempt physically delivered FLEX options from any contract limits under this rule.

Institutional Demand Supports Expansion of IBIT Trading

Tim Sun of HashKey Group confirmed Nasdaq has now submitted a second request to increase IBIT options limits. He stated institutional interest in Bitcoin exposure continues to rise through regulated, on-exchange instruments like IBIT. Sun emphasized the shift reflects allocation-based strategies over short-term speculation in Bitcoin derivatives.

Lai Yuen, investment analyst at Fisher8 Capital, supported the increase as enabling broader product development for IBIT. “This should be good for long-term IBIT flows,” Yuen told Decrypt regarding institutional capital allocations. The proposal is expected to allow more capital deployment into structured strategies around BlackRock’s ETF.

Eric Balchunas of Bloomberg noted, “IBIT is now the biggest bitcoin options market in the world by open interest.” His statement reflects IBIT’s growing role in institutional trading infrastructure for Bitcoin exposure. Jeff Park from Bitwise Invest Advisors tweeted that IBIT options are “finally getting the treatment it deserves.”

BlackRock Expands IBIT Holdings Across Funds

BlackRock continues to expand its Bitcoin ETF presence across its internal portfolios. A separate filing on Wednesday showed its Strategic Income Opportunities Portfolio raised IBIT holdings by 14% in Q3. The fund now holds $155.8 million in IBIT, according to the disclosed figures.

BlackRock currently holds over $71 billion in Bitcoin across its managed funds, based on Q3 figures. The new options cap would support roughly $5.3 billion in IBIT-linked positions, or around 8% of that total. Derek Lim of Caladan stated this ratio aligns with ETF standards for institutional exposure limits.

Lim added that lower volatility could support Bitcoin prices by reducing risk premiums over time. He noted that realized volatility may drop by 50 to 100 basis points over the next six to 18 months. Bitcoin recently climbed from $70,000 to $110,000 during a period of declining volatility.

BlackRock’s IBIT has evolved into a key vehicle for institutional Bitcoin strategies. Nasdaq’s proposal reflects this momentum, seeking to increase options capacity for IBIT on a regulated exchange. The SEC is now reviewing public feedback before ruling on the proposed position limit increase.

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