Nasdaq ISE Seeks Major Expansion of IBIT Options Trading Limits

Nasdaq’s International Securities Exchange (ISE) has filed a new proposal with the U.S. Securities and Exchange Commission (SEC) that could significantly increase the trading capacity for options linked to BlackRock’s iShares Bitcoin Trust (IBIT). The exchange is requesting that position and exercise limits for IBIT options be boosted from 250,000 contracts per side to one million contracts, a move that would place the product in the same tier as highly liquid global ETFs such as iShares MSCI Emerging Markets (EEM) and iShares China Large-Cap (FXI).

ISE says the sharp rise in IBIT options activity throughout 2025 has created a need for greater flexibility, especially for institutional traders and market makers who rely on options to hedge risk, enhance yield strategies, and manage large exposures. According to the filing, IBIT’s market capitalization, trading volume, and liquidity are now comparable to ETFs that already carry the one-million-contract threshold. The exchange also emphasized that even a fully utilized one-million-contract position would represent only about 7.5% of IBIT’s available float and just 0.284% of the total circulating bitcoin supply, suggesting limited risk of any market disruption.

ISE’s proposal also aims to remove position and exercise limits for physically settled FLEX IBIT options, aligning them with commodity-focused ETFs like the SPDR Gold Trust (GLD). FLEX options are commonly used by large funds seeking customized hedging tools and specialized exposure to bitcoin through IBIT’s rapidly growing derivatives market.

The timing of the proposal reflects IBIT’s surge in influence, as the BlackRock-backed ETF has recently overtaken Deribit to become the leading venue for bitcoin options open interest. With institutional demand for regulated bitcoin products accelerating, the exchange argues that expanding limits will support safer, more efficient trading.

The SEC is now accepting public comments on the proposed rule change, marking another step in the mainstream adoption of bitcoin-linked financial products.