Nasdaq has officially set its sights on gaining approval to introduce and trade bitcoin options, a move that mirrors the ambitions of its competitor, the New York Stock Exchange (NYSE), which earlier this year revealed similar plans to list bitcoin index options. However, both exchanges remain in a holding pattern, awaiting the necessary regulatory clearance.

In a statement released Tuesday, Nasdaq disclosed its pursuit of regulatory approval to facilitate the launch and trading of options tethered to the price of bitcoin (BTC). The proposed Nasdaq Bitcoin Index Options (XBTX) would be developed in collaboration with CF Benchmarks, an established index provider, and would track the CME CF Bitcoin Real-Time Index, a benchmark operated by the Chicago Mercantile Exchange (CME). Nasdaq (NDAQ) asserts that this initiative would furnish investors with an effective means to hedge their investments in this volatile asset class.

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“This partnership further bridges the innovative crypto terrain with the robustness and reliability inherent in traditional securities markets, marking a pivotal step in the ongoing maturation of the digital assets sector,” commented Greg Ferrari, Vice President and Head of Exchange Business Management at Nasdaq.

Options trading is a vital instrument for investors aiming to manage risk, offering the holder the right, but not the obligation, to purchase or sell an asset at a predetermined price on a specified date. This strategy is particularly appealing in the context of the highly volatile cryptocurrency market.

Nasdaq’s initiative follows in the footsteps of the NYSE, which earlier this year announced its intention to list bitcoin index options, although it too is still awaiting approval from the Securities and Exchange Commission (SEC).