Too Few Strikes: Who Decides?

Discussion in 'Options' started by kperrin, Jan 27, 2009.

  1. kperrin


    I like to trade the iShares Silver Trust (SLV) but I find there are too few strikes. The UI trades in the $10.00 to $12.00 range, yet there are strikes only every dollar. It would seem to me that strikes every $0.50 would provide a lot more precision and flexibility.

    The difference between ITM and OTM is simply too great at $1.00 intervals

    Who decides this sort of thing and how?
  2. The exchanges have rules that decide the listing criteria for stocks.

    They have rules for which strikes are permissible. The listing of strikes at $1 intervals took some doing. You can forget about half-dollar intervals.

    There are already too many stocks and too many different option series. The exchanges do not want to add more for no reason. And your reason is not good enough.

  3. Silver futures have $0.25 increments at the ~$12/ounce level. :cool:
  4. dmo


    And crude futures have $.50 increments, and had such increments even when crude was over $100.

    I guess if you started with equity options you're used to it. But coming from futures options, I too find the paucity of strikes in equity options to be very frustrating.