# monthly contract volume required for penny increments?

Have the exchanges disclosed their criteria?

Does anyone have a best guess based upon observations of volume (however you wish to define it)?

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You are referring to the Penny Pilot Program. Only options whose premiums are quoted at a price less than \$3 may be eligible for penny increments, except for IWM, QQQ, and SPY, which are always quoted in pennies. The list of permitted classes doesn't seem to come from specific volume criteria. Instead, the SEC and the exchanges together roll-out names in phases. CBOE's proposal for mini-options gives some additional insight: There is a price test for entry into the Penny Pilot Program which excludes “high premium” classes, which are defined as classes priced at$200 per share or higher at the time of selection.

This is why GOOG is not in the Penny Pilot Program, for example.

The best bet is to use the list of eligible classes from ISE or CBOE. Note that Rule 6.42 states, "the Penny Pilot shall expire on June 30, 2013".

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Saw that but was wondering why BAC's in pennies. Was BAC added when it was trading ~ $3 and never taken off? I hope they let it expire. When volumes collapse, they'll finally move towards making it universal. – user3232 Apr 5 '13 at 20:01 @JoeCoderGuy I don't see what you're referring to. The BAC options chain shows quotes below \$3 as sub-penny increments, and quotes above \$3 as nickle increments. (The \$3 rule is for premiums, not prices of the underlying.) –  chrisaycock Apr 5 '13 at 20:08
ah, woops. didn't read that too closely. still they're not giving it to the options with thin volume. i guarantee there's a correlation –  user3232 Apr 5 '13 at 20:21

The first 13 were some pretty active securities, but they definitely weren't the most.

chrisaycock's noted $3 threshold undoubtedly plays a role, so does volume, but there's probably some sort of other political consideration (like "don't leave out the small caps!") that could be quantified. It looks like, generally speaking, it's the highest dollar volume underlyings with most option premium volume under$3 as well as a few political choices here and there.

http://www.ise.com/assets/files/investors/Penny_Report.pdf