OPTIONTIGER BLOG

GET INSIGHTS OF FINANCIAL MARKETS, OPTIONS TRADING AND INVESTING.

Mini Options contracts introduced today

Mini Options Contracts

There is an important addition today to Options trading instruments. CBOE is introducing “Mini” Options with a base of 10 shares per contract as opposed to the standard 100 shares per contract.
You will notice these Options that have a (10) number and on the Thinkorswim platform, they are also denoted with the word “Mini”.

Advantages of Mini Options –

1) Now if you owned 40 shares of a stock, then you can hedge it with 4 contracts of the Mini. Previously the minimum you could buy was 1 contract which would be equivalent to 100 shares. Obviously you were over-hedging at that point.
2) And on the flip side, you could design a “covered call” strategy that precisely matches your holdings.
3) Of course, you can deal in much less size, especially on high priced stocks like AAPL or GOOG.
Not all stocks have Mini contracts yet. They’re in fact starting out only with a few. The list is provided here on the CBOE website. Over time, they expect to add more.
Please see image below on the Thinkorswim platform for AMZN.
Minis


Share this Article



Leave a Reply

Your email address will not be published. Required fields are marked *

Get access to Free Courses, E-Books, Market Updates and 500+ Video Library.

Join Free Now!




Futures and Options carry risk and may not be suitable for everyone. OptionTiger is an educational site, and is not a financial adviser or broker. If you need professional investment advice, please consult a registered investment adviser. All stocks, ETFs, commodities, Indices and other securities mentioned in our courses are for educational and illustrative purposes only, including all mention of Returns, Margin Calculations, and different Margin types. By visiting our site and accessing material, you are implicitly agreeing to these terms.
Copyright © 2012 to 2018 - All Rights Reserved by OptionTiger.com