Ask the Institute

Ask the Institute Archive

DATE: November 25, 2013

QUESTION:

Can you explain what mini options are and do they replace other options?

ANSWER:
In recent years, the prices of some stocks have risen to the hundreds of dollars per share and others have even risen to over one thousand dollars per share. At $1,000 per share, 100 shares would cost $100,000! Therefore, to make options trading on such stocks more accessible to individual investors, mini options were created.

Mini options have 10 shares as their underlying security, instead of the 100 shares that standard options have as their underlying. However, everything else is the same for mini options as for standard 100-share options. The expiration dates, strike prices and exercise style are all the same for mini options as they are for their standard, 100-share options. Mini options DO NOT replace any other options. Mini options trade side by side with standard 100-share options. To learn more about Mini options, view this segment of "Ask the Institute."

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