Pacific Exchange (PCX) announced that it will become the first US options exchange to begin quoting and trading all listed options in penny increments, a move that renews the debate about the viability of penny pricing.
PCX's attempt to implement penny pricing rests on simply changing its rules, which requires Securities and Exchange Commission (SEC) approval. But industry participants said the issue is considered far more complicated than a simple rule change and most likely will not be settled without a full industry comment period and hearings.
PCX said it planned to submit the paperwork to SEC shortly and hoped to receive the green light in the fourth quarter of this year. Options industry executives estimated the process could stretch into the first quarter of 2006.
One positive sign for faster approval has come from SEC officials, who voiced support for penny pricing of equity options. Elizabeth King, associate director...