Penny Priced Options

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Brian Anderson

Penny priced options (PPOs) are equities derivative options that trade in penny increments, unlike the majority of options that have a spread (difference between bid and ask) of five or ten cents. They are the product of the Penny Pilot Program that was initiated by the CBOE in November, 2006. The primary benefit is that the round trip cost of the trade can be pared down significantly (instead of rounded up, as with other spreads on the bid and ask). These options are associated with the most heavily traded equity issues. The high trading volume on the stocks positively correlates with the high Open Interest of the related option chain. Known as liquidity, substantial Open Interest has a higher probability of fetching the price quoted. Slippage occurs when the trader does not get an execution at the expected price. Approximately 75% of all option volume occurs on the equities listed below.

Here is a list from 2012 of equities (stocks and ETFs) that offer penny priced options:

sina,agnc,lulu,ffiv,gm,mcp,rvbd,arna,acas,aci,adm,adsk,ago,anr,apa,apwr,atpg,bax,bbby,bhi,bpop,cb,ci,cl,cma,cnx,crm,dcth,ek,eog,esi,esrx,eww,ewy,fis,fwlt,fxp,genz,ggp,gis,gps, hban,hot,hsy,ibn,vrsn,jdsu,key,kmp,kre,lnc,ma,mbi,mro,mtg,myl,nbr,ne,nke,nov,ntap,pcl,phm,pxp,qld,rcl,rsh,so,sun,swn,tsl,tso,twx,txt,tyc,vvus,whr,wlt,xl,xlnx,xop,yum,sina,agnc,lulu,ffiv, gm,mcp,rvbd,arna,qqq,iwm,spy,gfi,xlv,cien,amln,ctic,mdt,tivo,mnkd,mdvn,apol,bsx,xly,clf,zion,ioc,itmn,jcp,acl,stp,tlb,symc,amed,tm,ener,stt,bhp,nflx,ldk,spg,tif,wag,gme,xlk,aks,grmn,mrvl, xlp,unp,dtv,wmb,celg,gmcr,wdc,dal,fxe,cost,mjn,all,sii,rtn,dvn,ip,xme,kgc,ep,seed,win,dhi,adbe,pcx,spwra,lcc,pru,len,ewt,kgh,cree,siri,mmr,cenx,mt,abt,aem,aet,afl,akam,amat,amr,ang,apc, atvi,bbd,bcrx,bk,leap,lly,lo,low,m,mco,met,mmm,nue,mu,oxy,pard,pep,brcm,btu,bx,cal,cf,cmcsa,csx,cvs,cx,dd,erts,ewj,fdx,fnm,fre,gild,glw,hbc,hes,hl,hog,hon,joyg,jwn,kft,pm,pnc,qid,shld, slm,slw,sqnm,stec,stx,su,tck,teva,tlt,tza,uaua,ure,utx,wfr,wft,xlb,xrx,xto,yrcw,bcrd,dis,gnw,uup,abx,axp,auy,ba,bbt,bby,bp,chk,cit,cof,cvx,de,dow,drys,efa,mrk,ms,nly,nok,nvda,orcl,palm,pbr, pg,pot,rf,rig,rmbs,s,sds,etfc,ewz,fas,faz,fitb,fslr,fxi,gdx,gg,gld,hgsi,hig,hpq,ibm,iyr,jnj,jnpr,ko,lvs,mcd,mgm,mon,mos,skf,slb,slv,srs,sso,sti,svnt,tbt,ung,unh,ups,usb,uso,uyg,v,wfc,wynn,x,xhb, xli,xlu,xrt,gs,rio,emc,xom,wmt,hd,vlo,aa,dell,sndk,bsc,pfe,ebay,hal,jpm,wm,f,tgt,aig,nem,vz,sbux,aapl,mo,dndn,amgn,yhoo,qcom,gm,xle,dia,oih,nyx,csco,xlf,t,c,amzn, rimm,cop,bmy,wfmi,ge,msft,smh,intc,cat,txn,flex,sunw,a,fcx,bmy,nyx,xlf,

More information:

https://www.cboe.org/publish/PennyPilot/PennyPilotClasses.csv

http://www.amex.com/amextrader/sysInfo/ANTE/PennyPilotReport_11022007FINAL.pdf

http://www.cboe.org/hybrid/pennypilot.aspx --1modelcitizen 11:30, February 15, 2012 (PST)