US market operator BATS Global Markets will launch mini options for five of the most actively traded securities on its options market, as it standardises processes for both mini and regular options contracts.
The mini options will be available from 18 March for contracts with underlying shares in Apple, Amazon, Google, SPDR Gold Trust and SPDR S&P 500, and trading will be free for members of BATS Options.
Mini options, which represent a deliverable of 10 shares of an underlying security compared to 100 shares for standard options contracts, have grown in popularity among US investors recently.
BATS’ mini options will extend risk management tools for investors owning less than 100 shares for those trading regular options.
“While the trading unit size of the mini options contract is less than a standard option contract on these stocks, the post-trade and regulatory costs are consistent with a standard option contract,” said Jeromee Johnson, vice president and head of BATS Options. “For this reason we are offering free trading in the mini options to minimise costs for investors and fuel adoption of these new and innovative products.”
Competing venue IntercontinentalExchange (ICE) will also offer trading of mini options from Monday, after gaining regulatory approval in November.
“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,” Gary Katz, president and CEO of ISE said in November, adding the new product would likely find greatest appeal among retail investors.