Under the pilot program, CBOE may select up to five equity classes on which $1 increment strike prices may be listed and CBOE also may list $1 strike price series on any other classes that are selected by other exchanges pursuant to their respective pilot programs. For a class to be eligible for the pilot program, an underlying stock must close under $20 and strike prices only may be from $3 to $20.
CBOE sought SEC approval to list options with tighter price intervals in an effort to better align option trading opportunities with lower priced stocks. Traditionally, options strike prices are set in $5 increments on stocks that are priced over $20 and in $2.50 increments for stocks that trade under $20 and, for certain classes, between $25 and $50.
CBOE, the world's largest options marketplace and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about the CBOE and its products, access the CBOE website at http://www.cboe.com.
