Photo credit: Michael Nagle/Bloomberg

The New York Stock Exchange (NYSE) American has proposed a rule change to list and trade options for Ether exchange-traded funds (ETF) issued by Grayscale and Bitwise.

On Aug. 7, the NYSE American, along with the asset managers, filed with the Securities and Exchange Commission, asking the regulator to “permit the listing and trading of options” on the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Mini Trust (ETH).

The exchange also asked the SEC to consider the same for “any trust that holds Ether,” but clarifying that the proposed rule change would apply solely to Ether funds listed on the platform.

The filing states that “Ether [exchange-traded products] offer investors a cost-effective way to participate in the ether market through the securities market.” The key distinction between Ether ETPs and traditional ETFs lies in their underlying assets. While ETFs can hold a mix of securities, financial instruments, and precious metals, Ether ETPs exclusively hold ether, which, like precious metals, is classified as a commodity.

“The Exchange believes that offering options on Ether ETPs [...] will benefit investors by providing them with an additional, relatively lower-cost investing tool to gain exposure to spot Ether,” the NYSE American said in the filing.

It added that allowing options trading would offer investors a hedging vehicle to meet their investment needs tied to Ether products and positions.

The SEC filing indicates that comments on the proposal are due within 21 days of its publication in the Federal Register.

The NYSE American’s filing follows a similar request from Nasdaq to the SEC, seeking approval to list and trade options for Blackrock’s iShares Ethereum Trust (ETHA), the only Ether ETF listed on the latter’s platform.

The SEC initially approved several spot Ether ETFs in May. Those began trading in the US in July and have so far recorded $322.85 million in trading volume, data from SoSoValue shows.

Observers posit that regulatory approval on Ether ETF options trading might take time, as regulators have yet to give their blessing on options trading on spot Bitcoin ETFs.