Tangent -- To The Third Power: So Called "Due Bill" Trading May Begin On One Or More Exchanges, Well In Advance Of Actual SEC Clearance -- On "When Issued" Basis... But Zero Protection Against Any "Non-Issuance".

This evening, we are reading that the CBOE (and others) may begin to list "when issued" trades in some Bitcoin ETFs as early as Thursday night. [I won't link it -- given how irresponsible I think such a trading scheme is -- at present. But strictly speaking. . . it is. . . lawful, in the US.]

A bit of background: a given security may trade in "due bill" form over an exchange, or between private (but very large Rule 144A) institutions, while one awaits an SEC approval. The key difference -- compared to actual "regular way" trading, is that the traders are simply TRUSTING that the ultimate counter party will deliver the physical security to the holder of the "due bill" -- all when, as and if. . . regular way trading is finally authorized by an SEC effectiveness order.

So this is clearly a "buyer beware" event -- 100%. The SEC won't be available if you've bought or sold a due bill from a bad actor.

Now you know.

On blue-chip corporate bonds, one often sees due bill trading, as the parties all are large Wall & Broad, old line institutional investors -- their trading desks have swapped securities into the high billions, over decades and in some cases, centuries.

Me? I'm pretty sure I want no part of a due bill in the underlying Bitcoin ETF space. The SEC's been hacked on X-itter (with the FBI running the hackers to ground, now), and I'm supposed to just trust. . . that whomever I pay for a share of the "when issued" ETF will in fact send me the paper or uncertificated security some days or months from now, when SEC clears the physical?

Hard pass, bro.

Out.

नमस्ते