Grayscale's CEO said options are good for investors as they help with price discovery and navigating the market.
In an X post on Feb. 5, Grayscale CEO Michael Sonnenshein advocated for regulators to approve exchange-listed options for spot Bitcoin exchange-traded funds (ETFs). He argued that options are good for investors as they support “price discovery and can help investors better navigate market conditions or achieve desired outcomes, such as generating income.”
An exchange-traded option is a standardized contract that can be used to buy (using a call option) or sell (using a put option) a certain quantity of a particular financial asset at a predefined price (the strike price) on or before a specified date. With options trading, investors can make predictions about the future movement of particular stocks or bonds and the stock market as a whole. Under options contracts, traders have the choice — but not the obligation — to purchase or sell an underlying asset by a specified date at a predetermined price.
These options are traded on exchanges like the Chicago Board Options Exchange (Cboe) and are regulated by the United States Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Clearinghouses like the Options Clearing Corporation (OCC) provide guarantees for the exchanges.
