Nasdaq ISE, LLC filed a proposed rule change with the U.S. Securities and Exchange Commission (SEC) on Nov. 13 seeking approval to boost the position and exercise limits for options on BlackRock 's iShares Bitcoin Trust ETF (IBIT).
The ISE said the adjustment is needed to account for the fund's growth and trading activity.
Nasdaq ISE (International Securities Exchange) is a U.S. electronic options exchange operated by Nasdaq. It was the first fully automated, electronic options exchange in the United States when it launched in May 2000.
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What are position and exercise limits?
Position limits and exercise limits exist to cap the number of options contracts an investor, acting alone or in concert with others, may control at any given time.
These limits are intended to reduce the risk of manipulative schemes and other adverse market effects associated with concentrated options exposure.
Nasdaq ISE proposes raising limits on IBIT options
Nasdaq ISE stated that "to achieve the balance," it is proposing to increase both limits for IBIT options to 1,000,000 contracts. The ETF currently qualifies for a 250,000-contractposition limit, which is the highest tier available under the exchange's existing framework.
Under Nasdaq ISE rules, contract caps vary depending on an ETF's liquidity and market capitalization.
Smaller funds face limits between 25,000 and 200,000 contracts, with automatic adjustments applied during splits or recapitalizations.
IBIT, however, qualifies for the top category, permitting up to 250,000 call or put contracts on one side of the market.
The exchange noted that IBIT's size and volume place it among the most actively traded exchange-traded products tied to a single underlying asset class.
As a result, Nasdaq ISE argued that the ETF now warrants a materially higher threshold that aligns with its market depth.
The ISE emphasized that raising the ceiling to 1 million contracts is consistent with existing position limits and exercise limits for options on iShares MSCI Emerging Markets, iShares China Large-Cap ETF, and iShares MSCI EAFE ETF.
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Nasdaq ISE analyses proposed IBIT limits
In its filing, Nasdaq ISE said it reviewed IBIT's size relative to the entire Bitcoin market to evaluate whether the higher limits could create outsized exercise risk.
As of Sept. 22, roughly 19,923,945 Bitcoin were in circulation. At a Bitcoin price of $112,748, that puts the asset's total market capitalization above $2.246 trillion.
Based on these figures, the exchange calculated that a 1 million–contract limit for IBIT options would equal 7.39995% of IBIT's outstanding shares.
However, since IBIT uses an issuer-managed creation and redemption process, ISE said the potential impact should instead be compared against the entire Bitcoin supply.
Under that lens, the exchange estimated that the exercisable risk would represent just 0.284% of all Bitcoin in existence.
Nasdaq ISE added that even in an extreme scenario — where every IBIT option contract allowed under the proposed 1,000,000-contract limit was exercised at the same time — the effect on the broader Bitcoin market would be "virtually unnoticed."
The exchange said its analysis shows the higher cap remains "appropriate for options on IBIT given its liquidity."
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This story was originally published by TheStreet on Nov 26, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
