The Securities and Exchange Commission gave notice of the Cboe Exchange's proposed rule change, allowing for listing and trading options on the Grayscale Ethereum Trust ETF, Grayscale Ethereum Mini Trust ETF, and the Bitwise Ethereum ETF. The proposal seeks to amend existing rules to facilitate these options trades, adding a position limit of 25,000 contracts per Ethereum Fund option. The Cboe Exchange argues that trading options on these funds will provide investors a cost-effective and transparent way to gain exposure to Ethereum without directly handling the cryptocurrency. The SEC is inviting public comments on this notice and has waived the typical 30-day waiting period, allowing the rule to take immediate effect.
Simple Explanation
Imagine the Cboe Exchange wants to play with Ethereum options like they play with toys and games. They asked permission to list and trade these special Ethereum options, and the people who check the rules said, "Yes, but be careful how you play!" They put a limit on the number of options you can play with at one time, like saying you can only have 25,000 Legos to build a castle.