Aug 27 (Reuters) - Nasdaq is seeking the green

light from regulators to launch and trade options on a bitcoin

index, the exchange operator said on Tuesday.

The U.S. Securities and Exchange commission has yet to

approve options based on any of the individual exchange-traded

funds tied to spot bitcoin prices that made their debut in

January, including a Nasdaq application to trade options on

BlackRock's ( BLK ) $21.3-billion iShares Bitcoin Trust ETF

.

The proposed index options - listed derivatives offering a

quick and inexpensive way to amplify exposure to bitcoin - on a

bitcoin index would give institutional investors and traders an

alternative way to hedge their exposure to the world's largest

cryptocurrency.

"It's important for options on bitcoin to be available for

this asset class to be fully normalized," said Matt Hougan,

chief investment officer of Bitwise, one of the group of asset

managers that brought bitcoin ETFs to market this year. "We're

missing a part of the liquidity picture that ETF options would

provide."

Options are listed derivatives that give the holder the

right to buy or sell an asset, such as a stock or

exchange-traded product, at a predetermined price by a set date.

They offer traders a cheap way to amplify their purchasing

power, while institutional investors use them to hedge risk.

The proposed Nasdaq Bitcoin Index Options would track the

CME CF Bitcoin Real-Time Index, developed by CF Benchmarks to

track bitcoin futures and options contracts available on the

exchange operated by CME Group ( CME ), Nasdaq said.

While waiting for regulators to approve or deny options on

the new spot bitcoin ETFs, traders have turned to other

products, such as recently-launched leveraged ETFs tied to

bitcoin and options on those funds.

Exchanges began applying for the spot bitcoin ETF options as

soon as it was clear the SEC would approve the underlying ETFs

in January. But in recent weeks, they have withdrawn and then

refiled those applications in response to SEC comments, said

people familiar with the matter.