The US Securities and Exchange Commission (SEC) has approved a major rule change for BlackRock’s iShares Bitcoin Trust (IBIT). The decision raises the trading limit for IBIT options from 250,000 contracts to 1 million contracts, giving investors much more room to trade.

The new rule took effect immediately after the SEC approved a proposal from NYSE Arca. The proposal was filed under Section 19(b)(1) of the Securities Exchange Act and Rule 19b-4. Even though the rule is already active, the SEC said it will continue accepting public comments.

The approval is important because it allows investors, especially large institutions, to trade many more options linked to BlackRock’s spot bitcoin ETF. IBIT is currently the largest spot bitcoin ETF in the United States based on assets under management.

According to the SEC, NYSE's proposal follows a similar Nasdaq request that was approved in April 2026, increasing the IBIT options position limit.

In its proposal in November 2025, Nasdaq said the old limit of 250,000 contracts was no longer enough because trading in IBIT options has grown quickly. The exchange said raising the limit to 1 million contracts better matches today's market.

In its filing, NYSE Arca said that the higher limit is designed to keep pace with the rapid growth in IBIT options trading. The exchange also said the larger limit should improve market liquidity and help market makers manage their trading positions more easily.

The exchange explained that the previous limit made it harder for large investors to carry out big trading and hedging strategies.

Some investors had to split their trades into smaller positions because they could not go above the exchange's limit. With the new limit, institutional investors can place larger trades without facing those restrictions. This could make the options market more efficient and reduce the need to spread trades across different exchanges.

NYSE Arca also pointed out that the new limit matches similar rules already used by Nasdaq ISE, Nasdaq PHLX, and BOX Exchange. Having the same limits across major exchanges creates a more consistent trading environment for investors.

The SEC's decision comes as demand for spot bitcoin ETFs has cooled amid bitcoin's recent price decline. Although IBIT attracted strong investor inflows after launching in 2024, it has recently experienced billions of dollars in outflows. Despite this, it remains one of the most widely held bitcoin investment products in the U.S.

As more people trade IBIT options, exchanges believe the higher limit will help improve liquidity. It should also make it easier for market makers to buy and sell options while offering better prices to investors.

Many analysts see the SEC's latest decision as another sign that the bitcoin ETF market is becoming more established. As trading activity continues to increase, exchanges are updating their rules to better meet investor demand.

The higher options limit is expected to support larger institutional trades, improve market liquidity, and make trading more efficient. Better liquidity can also help investors complete trades more easily and at more competitive prices.