The IBIT Bitcoin ETF has been available since early 2024, and in recent weeks, it has also become optionable. Issued by BlackRock, this exchange-traded fund (ETF) is set to revolutionize Bitcoin investing by merging cryptocurrency exposure with the familiarity and security of traditional markets.
What Exactly is the IBIT ETF?
The IBIT (BlackRock USD Institutional Digital Custody ETF) is a spot Bitcoin ETF launched by BlackRock, the world’s largest asset management firm. It provides investors with direct exposure to Bitcoin’s price movements within the framework of a regulated exchange.
Designed to appeal to both retail and institutional investors, the IBIT ETF offers a transparent structure and robust security, addressing many of the risks and uncertainties associated with the traditional cryptocurrency market. It is widely regarded as a bridge toward greater mainstream acceptance of digital assets.
This ETF is an ideal solution for those who want exposure to Bitcoin without dealing with the complexities and risks of directly holding cryptocurrency.
Key Features of the IBIT ETF:
- Issuer: BlackRock
- Launch Date: January 2024
- Trading Venue: NASDAQ
- Assets: Spot Bitcoin (physically backed, not futures-based)
- Expense Ratio: 0.25% per annum
- Custodian: Coinbase Custody Trust, a leader in cryptocurrency security
Why Choose IBIT?
The IBIT ETF stands out due to its unique combination of accessibility, security, and efficiency:
Advantages:
- Options Trading Capability: Opens up a variety of strategies, from hedging to speculation and income generation.
- Institutional Security: Backed by BlackRock and Coinbase Custody Trust, ensuring high levels of trust and protection.
- Regulated Structure: Offers the transparency and oversight of traditional investment vehicles.
- Cost-Effective: Low management fees compared to direct Bitcoin investments.
- Ease of Access: No need to manage private keys or navigate unregulated crypto exchanges.
- Fractional Investing: Small capital requirements make it easy for anyone to enter the crypto market.
Drawbacks:
- No Direct Bitcoin Ownership: While a downside for some, it simplifies the investment process for many.
- Bitcoin’s Volatility: Like any Bitcoin-linked product, price swings can be significant.
Trading IBIT – How to Get Started
For investors using platforms like Interactive Brokers, Tastytrade or Tradier, the IBIT ETF can be purchased outright as a spot asset.
Excitingly, the IBIT ETF now offers options with weekly expirations. Its high liquidity makes it an attractive choice for short-, medium-, or long-term trading strategies in Bitcoin.
Top IBIT Options Strategies
- Short Put: Ideal if you’re willing to acquire IBIT shares at a lower price. You collect the premium upfront, which reduces your effective purchase price.
- Covered Call: If you already own IBIT shares, you can generate regular income by selling call options.
- Vertical Spread: A low-risk way to bet on price movements while capping potential losses.
Why IBIT is a Game-Changer for Options Traders
With Bitcoin’s notorious volatility, the IBIT ETF’s options boast high implied volatility (IV), making it a premium collector’s dream.
At NinjaSpread, we’ve integrated IBIT into our scanner, enabling users to search for optimal spreads and strategies with ease. You can now identify lucrative opportunities based on IV levels, strike prices, and expiration dates, all tailored to your trading goals.
Want to Master IBIT Options?
Check out the exclusive NinjaSpread platform for cutting-edge tools to analyze IBIT options. With user-friendly filters and actionable insights, you’ll gain a competitive edge in Bitcoin options trading.
Here are some predefined presets, that you can use to scan for IBIT options strategies.
Calendar spreads: short, mid term DTE, OTM bullish direction, backwardated IV skew.
Butterflies: mid term upside butterflies, with 5 point width between legs.
Jade Lizards: if you think it will fall or go sideways with higher IV, Jade Lizards are a very profitable strategy. This preset is only looking for the ones with higher than 80% POP (probability of profit).
You can also create your own presets or use predefined ones using NinjaSpread. Let me know how you would trade IBIT and we can help you setup your presets and it can also notify you when available in the market.
