Thursday, January 31, 2013

ISE to introduce mini options on March 18th

Hey Traders! I am not sure how many of you may be following this story or if you are even aware that its happening. But a while back the ISE exchange announced that it had created a new option product that they are calling mini options. The mini options are going to open up the playing field for people with smaller accounts to play big names like: AAPL, AMZN, GOOG, GLD, and SPY.

The new mini contracts are going to be identical to the regular option contracts with the amount of shares it represents being the only difference. The mini option contracts will represent 10 shares vs the typical 100 shares.

I don't know about you but I am pretty excited about this. Because there are times where I would love to play some of these names but the capital required to take delivery of 100 shares of say AAPL by selling a naked put at current prices is about $45,000, which is a significant portion of my portfolio. But with the new mini's it will be a tenth that size, which would make me more comfortable playing those names.

Here is the release for November of last year:

The International Securities Exchange (ISE) today became the first exchange to confirm a launch date of March 18, 2013 to commence trading in Mini Options. Since receiving Securities and Exchange Commission (SEC) approval for this innovative new product offering, ISE has been coordinating with its member firms to determine an appropriate date for launch readiness.
Mini Options will represent a deliverable of 10 shares of an underlying security, whereas standard contracts represent a deliverable of 100 shares. ISE will initially list Mini Options on the following securities: AAPL, AMZN, GLD, GOOG, and SPY.
“We are very pleased to announce a launch date of March 18, 2013, to begin trading Mini Options,” said Gary Katz, President and CEO of ISE. “This exciting new product will make trading options on popular, high-priced names like Google and Apple more affordable and more flexible for the retail segment of the market. We look forward to coordinating with our member firms to achieve a smooth rollout of Mini Options in March and to broadening the reach and appeal of the options product to retail investors with this new offering.”
Mini Options will have the same expiration dates as their standard counterparts, including Weeklies and Quarterlies. Strike prices will also align to those of the standard contracts, as will the quoted bids and offers. The fees associated with Mini Options will be filed with the SEC and announced at a later date.
I also heard on the Tasty Trade show yesterday that these option will be available to all of us that currently trade on the Think or Swim trade platform the day they go live. 

To read more follow this link:$Mini_Options$20121203.pdf

This is not only excited for my own personal trading, but it also comes at a great time. As many of you who have been reading, I am currently teaching a few friends about options trading. So these might be a great product for them in the event they want to trade some of these big names.

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