Key Highlights:
- SEC announces review of Cboe’s MBTX options tweak for penny-level trading below $3.
- The proposal targets tighter spreads and easier trading for retail users.
- Regulators seek data on fraud prevention before any approval or rejection is granted.
The US Securities and Exchange Commission (SEC) announced through an official release today, December 31, 2025, that it has started reviewing a proposal by Cboe Exchange and it would change how small buy and sell quotes can be for options that are linked to a Mini Bitcoin ETF index.
The agency here wants to make sure that the trading rules for Bitcoin-related options are clear, fair and safe for the investors. As the crypto-related products are risky, regulators are paying extra attention to how these markets work. The SEC is also wants the public to share their feedback on the proposal, which can be submitted up until January 21, 2026.
Proposal Details
According to the release by the SEC, the proposal was submitted back in September 2025 and it is asking to change how prices move for options that are linked to its Mini Bitcoin ETF index.
The main idea here is that if an option is priced below $3, it could move in 1-cent and if it is priced at $3 or more, it would move in 5-cent steps.
The SEC published this proposal in early October 2025 so the public could comment. No one commented at that time. Due to this, the SEC decided in November 2025 to take more time to review it and has now formally started a deeper review process.
According to Cboe this change would make its Bitcoin-linked options similar to other popular products, like options tied to the iShares Bitcoin Trust, which already allow small price movements.
Moreover, smaller price steps help everyday investors get better prices, reduce the gap between buying and selling prices, and improve overall trading activity. Cboe also says its trading system can easily handle the change and that it would only affect this one type of option, not the entire market.
SEC’s Key Concerns
As of now, the SEC is not convinced that Cboe has fully shown that the benefits, like better pricing and tighter buy-sell spreads, are greater than the risks. One concern is that smaller price movements could make it easier to manipulate prices, especially in fast-moving crypto-related markets.
The agency is also asking the public to go through the data closely, including whether there is real demand for smaller price steps, whether spreads would actually improve, and whether matching similar products like IBIT options do make sense.
Moreover, no decision has been made yet. This process is simply about gathering more information. While Cboe believes that more pricing options will help traders and improve liquidity, regulators are clear that Cboe must provide strong evidence to back up those claims before any approval is granted.
Timeline and Submission Process
Cboe filed the proposal on September 30, 2025 and it was published on October 3, 2025. The SEC extended its review on November 3, 2025 and formal proceedings announcement was made today on December 31, 2025. Public comments close on January 21, 2026, replies to be submitted by February 4, 2026.
This review comes as trading in Bitcoin ETF options is growing fast. Cboe wants MBTX options to match competitors like IBIT, which already trade in small price steps, which could help traders hedge better and improve liquidity. However, because crypto markets are volatile, the SEC is being very cautious.
Regulators want strong evidence before they approve any changes. Journalists should watch public comments closely, as earlier filings drew little attention but interest may rise now.
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