Cboe Exchange Rule 5.4 amendment - MBTX options trading increments

Content

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.

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

  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 (https://www.sec.gov/rules/sro.shtml), the Exchange's website (https://www.cboe.com/us/options/regulation/rule_filings/bzx/), 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.

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.

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

  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.

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.

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

  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.

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.

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)

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.

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.

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.

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)

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)

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

• Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or

• Send an email to rule-comments@sec.gov. Please include file number SR-Cboe-2025-075 on the subject line.

Paper Comments

• 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 (https://www.sec.gov/rules/sro.shtml). 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.

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,

  be, and hereby is, approved on an accelerated basis.

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. (39)

Sherry R. Haywood, Assistant Secretary. [FR Doc. 2026-06475 Filed 4-2-26; 8:45 am] BILLING CODE 8011-01-P

Footnotes

(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.

(9) See https://cdn.cboe.com/api/global/us_indices/governance/Cboe_Bitcoin_US_ETF_Index_Methodology.pdf (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 https://cdn.cboe.com/resources/membership/Cboe_Bitcoin_US_ETF_Options_Comparative_Overview.pdf

(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.

(14) 15 U.S.C. 78f(b).

(15) 15 U.S.C. 78f(b)(5).

(16) Id.

(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).

(21) See Micro Bitcoin Futures and Options, available at https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/micro-bitcoin.html.

(22) See Cboe Bitcoin U.S. ETF Index Options, available at https://www.cboe.com/tradable-products/cryptocurrency/bitcoin-etf-index-options/.

(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.

(24) See Rule 4.13(e) (permitting the Exchange to list MBTX options with expirations on Mondays, Tuesdays, Wednesdays, Thursdays, and
Fridays).

(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).

(26) Id.

(27) Id.

(28) See Rule 5.37(a)(4).

(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.

(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.

(37) 15 U.S.C. 78s(b)(2).

(38) Id.

(39) 17 CFR 200.30-3(a)(12).

Download File

Download