Notice2026-06475
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Cboe Rule 5.4
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 3, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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[Federal Register Volume 91, Number 64 (Friday, April 3, 2026)]
[Notices]
[Pages 17005-17010]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06475]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105131; File No. SR-Cboe-2025-075]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To Amend Cboe
Rule 5.4
March 31, 2026.
I. Introduction
On September 30, 2025, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to modify the minimum increment for options on the
Cboe Mini Bitcoin ETF Index (``MBTX''). The proposed rule change was
published for comment in the Federal Register on October 3, 2025.\3\ On
November 3, 2025, pursuant to Section 19(b)(2) of the Act,\4\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ On December 23, 2025, the Commission instituted proceedings
under Section 19(b)(2)(B) of the Act \6\ to determine whether to
approve or disapprove the proposal.\7\ The Commission received no
comments regarding the proposal. On March 11, 2026, the Exchange filed
Amendment No. 1 to the proposal, which supersedes and replaces the
original proposal in its entirety.\8\ The Commission is publishing this
notice and order to solicit comment on Amendment No. 1 in Sections II
and III below, which sections are being published verbatim as filed by
the Exchange, and to approve the proposed rule change, as modified by
Amendment No. 1, on an accelerated basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 104157 (Sept. 30,
2025), 90 FR 48071.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 104173, 90 FR 51424
(Nov. 17, 2025). The Commission designated January 1, 2026, as the
date by which the Commission shall either approve, disapprove, or
institute proceedings to determine whether to disapprove the
proposed rule change.
\6\ 15 U.S.C. 78s(b)(2).
\7\ See Securities Exchange Act Release No. 104508, 90 FR 61490
(Dec. 31, 2025).
\8\ Amendment No. 1 revises the proposal to provide additional
discussion and analysis supporting the proposed minimum increment
and to state in proposed Exchange Rule 5.4(a) that the proposed
minimum increments for MBTX options will apply as long as options on
the iShares Bitcoin Trust ETF (``IBIT'') participate in the Penny
Interval Program.
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II. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend Rule 5.4. The Exchange initially submitted this rule filing
SR-CBOE-2025-075 to the Securities and Exchange Commission (the
``Commission'') on September 30, 2025 (the ``Initial Rule Filing'').
This Amendment No. 1 supersedes the Initial
[[Page 17006]]
Rule Filing and replaces it in its entirety. This Amendment No. 1
provides additional support for the proposed rule change, as well as
adds a condition for Cboe Mini Bitcoin U.S. ETF Index (``MBTX
options'') to qualify for the proposed minimum trading increments and
makes other minor changes to the rule filing. The text of the proposed
rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the
Exchange's website (<a href="https://www.cboe.com/us/options/regulation/rule_filings/bzx/">https://www.cboe.com/us/options/regulation/rule_filings/bzx/</a>), and at the principal office of the Exchange.
III. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 5.4(a) to change the minimum
increment for all series of MBTX options to $0.01 for series trading
lower than $3.00 and $0.05 for series trading at $3.00 or higher (as
long as iShares Bitcoin Trust ETF options (``IBIT options'')
participate in the Penny Interval Program). The Exchange believes
market demand (including by retail investors, who generally prefer
lower trading increments) supports a lower trading increment for MBTX
options. Options overlying the components of the Cboe Mini Bitcoin U.S.
ETF Index (and the underlying exchange-traded funds (``ETFs'') \9\) are
actively traded (as are the underlying ETFs), and IBIT options in
particular.\10\ IBIT options are eligible for a lower trading
increment, supporting the view that there will be market demand for the
proposed trading increments for MBTX options.\11\ The Exchange offers
MBTX options to provide investors with opportunity to gain exposure to
the price movements and directional views of Bitcoin with the benefits
associated with index options, including cash-settlement, without the
risks associated with holding Bitcoin or with physical settlement.\12\
The proposed increments will allow MBTX options to more effectively
compete with IBIT options, which is by far the most actively traded
constituent of the Cboe Mini Bitcoin U.S. ETF Index.\13\ The Exchange
also expects this more granular pricing to lead to narrowing of the
bid-ask spread for these options and increase the possible number of
price points available to investors for these series. The Exchange
believes tighter spreads will increase order flow in MBTX options,
which additional liquidity ultimately benefits all investors. Finer
increments also permit more precise pricing in line with the
theoretical value of these options and thus more efficient hedging
opportunities, particularly with respect to IBIT options and related
products that may already trade in finer increments.
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\9\ See <a href="https://cdn.cboe.com/api/global/us_indices/governance/Cboe_Bitcoin_US_ETF_Index_Methodology.pdf">https://cdn.cboe.com/api/global/us_indices/governance/Cboe_Bitcoin_US_ETF_Index_Methodology.pdf</a> (which requires each
constituent to have monthly consolidated trading volume of at least
500,000 shares for each month within the immediately preceding six-
month period, an average consolidated trading volume of at least
1,000,000 shares over the immediately preceding six months, and a
market capitalization of at least $75 million).
\10\ Based on the six-month volume from August 1, 2025 through
January 31, 2026, options on four of the components were among the
top 10% of the most actively traded options, and seven of the
components were among the top 38% of the most actively traded
options.
\11\ Options overlying ProShares Bitcoin ETF (``BITO options'')
and Fidelity Bitcoin Fund (``FBTC options'') are also eligible for
the Penny Interval Program.
\12\ See <a href="https://cdn.cboe.com/resources/membership/Cboe_Bitcoin_US_ETF_Options_Comparative_Overview.pdf">https://cdn.cboe.com/resources/membership/Cboe_Bitcoin_US_ETF_Options_Comparative_Overview.pdf</a>
\13\ From August 1, 2025 through January 31, 2026, IBIT option
volume was nearly 25 times more than the volume of the next most
actively traded constituent, demonstrating that IBIT options are the
product with which MGTX [sic] options are primarily competing.
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The Exchange has analyzed its capacity and represents that it
believes that the Exchange has the necessary systems capacity to handle
any potential additional message traffic associated with the proposed
rule change. The Options Price Reporting Authority (``OPRA'') also
informed the Exchange it believes it has the necessary systems capacity
to handle any additional traffic that may result from this proposed
rule change. The Exchange does not believe any potential increased
traffic will become unmanageable since this proposed rule change with
respect to minimum trading increments is limited to a single class of
options.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\14\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \15\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \16\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
\16\ Id.
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In particular, the Exchange believes the proposed rule change will
protect investors and the public interest. As discussed above, the
Exchange believes market demand (including by retail investors, who
generally prefer lower trading increments) supports a lower trading
increment for MBTX options. As noted above, options overlying many of
the components of the Cboe Mini Bitcoin U.S. ETF Index are among the
most actively traded options (as are the underlying stocks). Options on
four of the ten components are among the top 10% of the most actively
traded options (and options on seven components are among the top 38%
of the most actively traded options). IBIT, BITO, and FBTC options are
eligible for a lower trading increment. As discussed below, MBTX
options were designed to compete with options on the constituents, and
IBIT options, in particular, given their significant volume, and to
create exposure to Bitcoin, which may trade in penny increments. The
Exchange believes this supports the view that there will be market
demand for the proposed trading increments for MBTX options and that
the proposed rule change will promote competition among options [and
other products] providing exposure to Bitcoin, which competition
ultimately benefits investors. The
[[Page 17007]]
Exchange believes the proposed rule change will also benefit investors
because it will permit more granular pricing in MBTX options, which may
lead to narrower bid-ask spreads for these options and increase the
possible number of price points (thus increasing execution
opportunities) available to investors for these series, which
ultimately increases liquidity to the benefit of all investors. The
Exchange believes tighter spreads will also increase order flow in MBTX
options, which additional liquidity ultimately benefits all investors.
The Exchange believes tighter spreads will also increase order flow in
MBTX options, which additional liquidity ultimately benefits all
investors. [sic]
As noted above, the Exchange believes the proposed rule change will
promote just and equitable principles of trade and remove impediments
to and perfect the mechanism of a free and open market and a national
market system because it will permit MBTX options to trade at the same
level of granularity as permitted for IBIT options, which is the
product with which MBTX options are primarily trying to compete.\17\
The Cboe Mini Bitcoin U.S. ETF Index is comprised of spot Bitcoin ETFs
listed on U.S. exchanges and is designed to reflect the price return
performance of these ETFs. MBTX options are designed to offer more
targeted exposure to the performance of these ETFs compared to options
on the full-size index. As noted above, the Exchange offers MBTX
options to provide investors with an alternative product to gain
exposure to the performance of Bitcoin. MBTX options were designed to
compete with options on the components of the Cboe Mini Bitcoin U.S.
ETF Index. MBTX options provide investors with opportunity to gain
exposure to these popular products with the benefits of index options
(including European-style, cash settlement) and without risks
associated with trading in Bitcoin and options on the ETF (including
concentration risk and American-style, physical settlement). Options on
three components of the Cboe Mini Bitcoin U.S. ETF Index are eligible
for the Penny Interval Program, which is unsurprising given these
constituents are actively traded in the market. MBTX options provide
investors with a cash-settled, European-settled [sic] option way to
gain exposure to the performance of these ETFs,\18\ and thus the
performance of Bitcoin, as opposed to an option that is physically
settled or subject to the risk of holding Bitcoin. As a result, the
Exchange believes MBTX options should be eligible for the same pricing
increments for competitive reasons to allow the Exchange to price these
options at the same level of granularity as permitted for the largest
of its competitor products \19\ to promote competition and help level
the competitive playing field among options that provide exposure to
some of the most dominant stocks in the industry.\20\ Permitting MBTX
options to trade in the same increments as IBIT options (as well as
BITO and FBTC options) will promote competition and help level the
competitive playing field, thus promoting just and equitable principles
of trade and removing impediments to and perfecting the mechanism of a
free and open market and a national market system.
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\17\ As [sic] noted above, IBIT, BITO, and FBTC options qualify
for the Penny Interval Program under Rule 5.4(a). However, the
volume of IBIT options for the six-month period ending January 31,
2026 is nearly 25 times the volume of the next most actively traded
constituent option and is the 11th most actively traded equity
option based on volumes during that timeframe.
\18\ Since MBTX options began trading in December 2024, the
correlation of the Cboe Mini Bitcoin U.S. ETF Index and the index
constituents ranged between approximately 96% and 100%. The
correlation between the index and iShares Bitcoin Trust ETF was
approximately 0.9999. Similarly, the correlation between the index
and ProShares Bitcoin ETF and Fidelity Bitcoin Fund (on which
options on those ETFs are also eligible for the Penny Interval
Program) was approximately 0.9562 and 0.9999, respectively.
\19\ As noted above, IBIT options were the 11th most actively
traded equity options for the six-month period ending January 31,
2026, and its volume was nearly 25 times higher than then [sic]
next-most actively traded index constituent option. It is for this
reason the proposed rule change ties penny and nickel increments for
MBTX options to IBIT options being eligible for the Penny Interval
Program.
\20\ The Exchange notes that other index options that trade on
the Exchange are currently permitted to trade in smaller increments
because competitive products can trade in those smaller increments.
See Rule 5.4 (the minimum for XSP options is $0.01 because that is
the minimum increment for SPY options, and the minimum increment for
DJX options is $0.01 for series below $3 and $0.05 for series $3 and
above because that is the minimum increment for DIA options).
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MBTX options are also intended to compete with Bitcoin futures
products. For example, the Chicago Mercantile Exchange (``CME''),
offers a Micro Bitcoin futures as a smaller-sized option to Bitcoin
futures that offers investors a way to ``fine-tune bitcoin exposure and
enhance . . . trading strategies.'' \21\ As noted above, this is
similar to the Exchange's purpose of offering options on the Cboe Mini
Bitcoin U.S. ETF Index.\22\ The minimum tick size for Micro Bitcoin
Futures is $0.50, and the notional value of that contract is $7,050. If
a 100 delta is applied to the futures (which is appropriate given the
ratio of the price movements of the future to the price movements of
Bitcoin is one-to-one), the ratio of the minimum interval to the
notional value of one contract is approximately 0.0071%. Using a 50
delta for the option (which is the approximate delta for an at-the-
money option) and given the notional value of an MBTX option contract
of $16,610, that ratio is 0.0120%. Therefore, the proposed minimum tick
size for MBTX options is still larger than the minimum tick size for
the Micro Bitcoin Futures when compared to the contract notional value.
However, given this percentage is 0.06% with the current minimum
increment of $0.05 for MBTX options, the proposed rule change would
permit MBTX options to trade in a relative increment much more
equivalent to that of Micro Bitcoin Futures.\23\ MBTX options also
provide investors with an alternative method to gain exposure to the
performance of Bitcoin, which is eligible to trade in penny increments
on various platforms, such as Coinbase. This is evidenced by the
approximately 0.999 correlation between the Cboe Mini Bitcoin U.S. ETF
Index and the S&P Spot Bitcoin Index since MBTX options began trading
in December 2024. Therefore, the Exchange believes the proposed rule
change will promote competition and help level the competitive playing
field, thus promoting just and equitable principles of trade and
removing impediments to and perfecting the mechanism of a free and open
market and a national market system, as it will permit MBTX options to
trade in increments that are the same as or similar to other
competitive products.
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\21\ See Micro Bitcoin Futures and Options, available at <a href="https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/micro-bitcoin.html">https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/micro-bitcoin.html</a>.
\22\ See Cboe Bitcoin U.S. ETF Index Options, available at
<a href="https://www.cboe.com/tradable-products/cryptocurrency/bitcoin-etf-index-options/">https://www.cboe.com/tradable-products/cryptocurrency/bitcoin-etf-index-options/</a>.
\23\ The current disparity in the tick size compared to the
notional value of the Micro Bitcoin futures and MBTX options is
larger if calculated without a delta adjustment (the ratio of
minimum increment compared to notional value without a delta
adjustment for MBTX options is 0.03% considering $0.05 minimum
increment compared to the ratio for Micro Bitcoin futures of
0.0071%). The non-delta-adjusted ratio of a penny increment compared
to notional value for MBTX options would be 0.006%, which is nearly
the same as the Micro Bitcoin futures ratio.
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The Exchange also believes consistency in pricing across related
products may better facilitate cross-product trading strategies. For
example, market participants may use options overlying components of
the Cboe Mini Bitcoin U.S. ETF Index, including IBIT options, to hedge
MBTX options or as part of other investment strategies involving MBTX
options. The same is true with respect to Bitcoin itself as well
[[Page 17008]]
as Bitcoin futures. Therefore, having the pricing increments for MBTX
options aligned with these related products will permit investors to
trade related products at more granular prices that may be more aligned
with their investment objectives.
Further, finer increments also permit more precise pricing in line
with the theoretical value of these options, particularly short-dated
options. The Exchange may list MBTX options with nonstandard
expirations,\24\ and the Exchange has observed significant trading in
MBTX options with these nonstandard expirations near their expiration
dates. Nearly half of MBTX options traded in from August 1, 2025
through January 31, 2026 were traded with one week or less to
expiration. Theoretical values of options change in response to changes
in the underlying more rapidly closer to their expiration. Therefore,
finer pricing permits investors to price these options to more
accurately reflect then-current market conditions. A larger increment
may create an artificially widespread [sic] compared to the option's
actual value, which may impact execution quality. Similarly, premiums
of shorter-dated options are often lower than premiums of longer-dated
options given the reduced time value that exists in options closer to
their expiration, so a lower trading increment is more proportional to
the value of these options and further promotes tighter spreads. The
value of the premium may fluctuate more given the proximity to
expiration, and the Exchange believes providing investors with the
ability to quote options nearing expiration in a finer increment will
result in more efficient and accurate pricing for investors.
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\24\ See Rule 4.13(e) (permitting the Exchange to list MBTX
options with expirations on Mondays, Tuesdays, Wednesdays,
Thursdays, and Fridays).
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The same reasons supporting why finer trading increments are
appropriate for shorter-dated options provided the same support for why
more granular strikes are permitted for shorter-dated options.
Specifically, in prior rule filings, the Exchange explained that
smaller strike intervals for weekly expirations permit strikes on a
more refined scale that, at times, will more closely reflect values in
the underlying index and allow market participants to roll open
positions from a lower strike to a higher strike in conjunction with
the price movement of the underlying.\25\ The Exchange believes this
provides market participants with efficient hedging and trading
opportunities. The Exchange believes this same principle applies to
trading increments for MBTX options, for which (as noted above) nearly
a majority of trading is in shorter-dated options. Shorter-dated
options experience more rapid time decay than longer-dated options
because, as options approach their expiration dates, even relatively
small movements in the underlying index can result in meaningful
changes to option values. Finer trading increments of $0.01 and $0.05
allow market participants to price MBTX options with greater precision
that more accurately reflects the theoretical value of these options as
they approach expiration. This precision is particularly important for
retail investors and market makers who need to adjust positions
frequently in response to rapid changes in option values.
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\25\ See, e.g., Securities Exchange Act Release Nos. 90748
(December 21, 2020), 85 FR 85759, 85762 (December 29, 2020) (SR-
CBOE-2020-118); and 104390 (December 15, 2025), 90 FR 59234, 59235
(December 18, 2025) (SR-CBOE-025-087).
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Additionally, market participants trading shorter-dated options
typically roll or adjust their positions more frequently than those
trading longer-dated options. With weekly and nonstandard expirations,
investors may be rolling positions multiple times per month. Finer
trading increments facilitate these frequent adjustments by providing
more price points at which market participants can efficiently enter
and exit positions. This is analogous to the Exchange's justification
for smaller strike intervals.\26\
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\26\ Id.
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Further, just as the Exchange has determined that smaller strike
price intervals are appropriate for shorter-dated options to provide
more efficient hedging and trading opportunities,\27\ the Exchange
believes that finer trading increments serve the same purpose. As noted
above, the Cboe Mini Bitcoin U.S. ETF Index comprises many highly
liquid, actively traded stocks that experience continuous price
discovery throughout the trading day. Shorter-dated MBTX options are
more sensitive to these underlying movements due to their higher gamma
(rate of change in delta). The proposed rule change to permit finer
trading increments would allow MBTX option prices to track these
underlying movements more closely, which the Exchange believes would
provide market participants with pricing that more closely reflects the
value of the underlying index. As a result, market participants would
be able to execute their hedging and investment strategies with greater
precision. While strike intervals determine the available price points
for different option contracts, trading increments determine the
precision with which those contracts can be priced. For shorter-dated
MBTX options, both forms of granularity would provide market
participants with the tools they need to manage their positions more
efficiently in a rapidly changing market environment.
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\27\ Id.
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The Exchange notes that MBTX options are eligible for complex order
trading, which permits the legs to execute in penny increments, and the
automated improvement mechanism (``AIM'') auction for simple orders,
which also permits penny executions.\28\ Therefore, current rules
already allow MBTX options to trade in penny increments in certain
situations. From August 1, 2025 through January 31, 2026, nearly 70% of
MBTX options volume executed in penny increments.
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\28\ See Rule 5.37(a)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
will not impose any burden on intramarket competition that is not
necessary or appropriate, because all Trading Permit Holders will be
able to trade MBTX options in the proposed minimum trading increments.
The proposed rule change will not impose any burden on intermarket
competition that is not necessary or appropriate, because it will
permit MBTX options to have pricing consistent with the pricing of its
largest competitor product (IBIT options), as well as two other
competitor products (BITO and FBTC options), which are part of the
Penny Interval Program and may currently trade in increments of $0.01
or $0.05. Additionally, the proposed rule change to permit MBTX options
to be listed in penny and nickel increments may relieve any burden on,
or otherwise promote, competition, as it will allow market participants
to trade these options at the same level of granularity as permitted
for competitor products and related products, as discussed above. The
Exchange also expects the more granular pricing to lead to narrowing of
the bid-ask spread for these options, which the Exchange believes will
increase order flow and price competition in MBTX options.
[[Page 17009]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
IV. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\29\ In particular, the
Commission finds that the proposed rule change, as modified by
Amendment No. 1, is consistent with Section 6(b)(5) of the Act,\30\
which requires, among other things, that the rules of a national
securities exchange be designed to remove impediments to and perfect
the mechanism of a free and open market and to protect investors and
the public interest. The proposal will permit minimum increments of
$0.01 for series of MBTX options priced lower than $3.00 and $0.05 for
series of MBTX options priced above $3.00, as long as IBIT options
participate in the Penny Interval Program.\31\ The Exchange states that
the proposal will promote competition and level the competitive playing
field by allowing MBTX options to trade at the same level of
granularity as IBIT options, the product with which MBTX options
primarily seek to compete.\32\ The Exchange states that since MBTX
options began trading in December 2024, the correlation between MBTX
and IBIT was approximately 0.9999.\33\ In addition, the Exchange states
that the correlation of the MBTX and the MBTX's component securities
has ranged between approximately 96% and 100%.\34\
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\29\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\30\ 15 U.S.C. 78f(b)(5).
\31\ See proposed Cboe Rule 5.4(a).
\32\ See Amendment No. 1 at 7 and 8. As discussed above, options
on two other components of the MBTX, BITO and FBTC, also are
eligible for the Penny Interval Program. The Exchange states that
from August 1, 2025, to January 31, 2026, the volume of IBIT options
was nearly 25 times the volume of the next most actively traded
constituent option of the MBTX, demonstrating that IBIT options are
the product with which MBTX options are primarily competing. See
Amendment No. 1 at footnote 5.
\33\ See Amendment No. 1 at 8, footnote 10.
\34\ See id.
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The Commission believes that the proposal will protect investors
and the public interest and remove impediments to and perfect the
mechanism of a free and open market by allowing MBTX options to trade
in the same minimum increments as IBIT options, a competing options
product on an underlying ETP that is highly correlated with MBTX.\35\
Permitting MBTX options to trade in the same minimum increments as IBIT
options could promote competition and provide investors with an
additional means to carry out their hedging and investment strategies.
In addition, consistent with the protection of investors and the public
interest, the Exchange represents that it believes that it has the
necessary systems capacity to handle any potential additional message
traffic associated with the proposal, and that OPRA has informed the
Exchange that it believes it has the necessary systems capacity to
handle any additional traffic that may result from this proposed rule
change.\36\
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\35\ The Commission previously approved proposals allowing
options to trade in the same minimum increments as competing
products that participated in the Penny Pilot Program. See, e.g.,
Securities Exchange Act Release No. 70087 (July 31, 2013), 78 FR
47809 (Aug. 7, 2013) (order approving File No. SR-Cboe-2013-055)
(permitting p.m.-settled options on the Mini SPX Index (``XSP'') to
trade in the same increments as SPDR S&P 500 Trust ETF (``SPY'')
options as long as SPY options participate in the Penny Pilot
Program); and 56565 (Sept. 27, 2007), 72 FR 56403 (Oct. 3, 2007)
(order approving File No. SR-Cboe-2007-98) (permitting a.m.-settled
XSP options and Dow Jones Industrial Index options to trade in the
same increments as SPY options and SPDR Dow Jones Industrial Average
ETF Trust (``DIA'') options for as long as SPY options and DIA
options participate in the Penny Pilot Program).
\36\ See Amendment No. 1 at 5.
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V. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to submit written data, views, and
arguments concerning whether the proposed rule change, as modified by
Amendment No. 1, is consistent with the Act. Comments may be submitted
by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5f2d2a333a723c3032323a312b2c1f2c3a3c71383029"><span class="__cf_email__" data-cfemail="91e3e4fdf4bcf2fefcfcf4ffe5e2d1e2f4f2bff6fee7">[email protected]</span></a>. Please include
file number SR-Cboe-2025-075 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-Cboe-2025-075. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection.
All submissions should refer to file number SR-Cboe-2025-075 and
should be submitted on or before April 24, 2026.
VI. Accelerated Approval of the Proposed Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
1 in the Federal Register. Amendment No. 1 revises the proposal to
provide additional discussion and analysis supporting the proposed
minimum increments and to state in Exchange Rule 5.4(a) that the
proposed minimum increments for MBTX options will apply as long as
options on IBIT participate in the Penny Interval Program. The
additional discussion and analysis supporting the proposed minimum
increments assists the Commission in evaluating the proposal and
determining that the proposal is consistent with the Act and the rules
and regulations thereunder applicable to a national securities
exchange. The proposed change to Exchange Rule 5.4(a) makes clear that
the proposed minimum increments for MBTX options are conditioned on
IBIT options' continued participation in the Penny Interval Program.
Amendment No. 1 does not raise new or novel regulatory issues. For
these reasons, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\37\ to approve the proposed rule change, as
modified by Amendment No. 1, on an accelerated basis.
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\37\ 15 U.S.C. 78s(b)(2).
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VII. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\38\ that the proposed rule change (SR-Cboe-2025-075), as modified
by Amendment No. 1,
[[Page 17010]]
be, and hereby is, approved on an accelerated basis.
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\38\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
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\39\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-06475 Filed 4-2-26; 8:45 am]
BILLING CODE 8011-01-P
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