As Securities and Exchange Commission (SEC) continued its rollout of the penny options pilot programme, the debate continues as to whether it is helping or harming the options industry.
The penny pilot programme rolled out an additional 28 option names on March 28, bringing the total number since last February to 63 individual and index options. The three-part rollout has been met with mixed opinions since it launched last year with 13 names. Exchanges such as NYSE Arca, Boston Options Exchange and the newly launched Nasdaq Options Exchange are fully behind the penny rollout of options, largely because penny priced options fit well with their high-speed electronic markets and pricing models.
But more established hybrid exchanges, such as Chicago Board Options Exchange (CBOE) and various market participants are concerned about what impact penny options have had on the market.
Securities Industry and Financial Markets Association (SIFMA) echoed CBOE’s concerns in...