The Board of Directors may establish minimum increments for options traded on the Exchange. When the Board of Directors determines to change the minimum increments, the Exchange will designate such change as a stated policy, practice, or interpretation with respect to the administration of Rule 6.42 within the meaning of subparagraph (3)(A) of subsection 19(b) of the Exchange Act and will file a rule change for effectiveness upon filing with the Commission. Until such time as the Board of Directors makes a change to the minimum increments, the following minimum increments shall apply to options traded on the Exchange:
(1) Subject to paragraphs (2) and (3) below, bids and offers shall be expressed in decimal increments no smaller than $0.10, unless a different increment is approved by the Exchange for an option contract of a particular series.
(2) Subject to paragraph (3) below, bids and offers for all option series quoted below $3 a contract shall be expressed in decimal increments no smaller than $0.05.
(3) The decimal increments for bids and offers for all series of the option classes participating in the Penny Pilot Program are: $0.01 for all option series quoted below $3 (including LEAPS), and $0.05 for all option series $3 and above (including LEAPS). For QQQQs, IWM, and SPY, the minimum increment is $0.01 for all option series. The Exchange may replace any option class participating in the Penny Pilot Program that has been delisted with the next most actively-traded, multiply-listed option class, based on national average daily volume in the preceding six calendar months, that is not yet included in the Pilot Program. Any replacement class would be added on the second trading day following January 1, 2017. The Penny Pilot shall expire on June 30, 2017.
(4) Except as provided in Rule 6.53C, bids and offers on complex orders, as defined in Interpretation and Policy .01 below, may be expressed in any net price increment (that may not be less than $0.01) that may be determined by the Exchange on a class-by-class basis and announced to the Trading Permit Holders via Regulatory Circular, regardless of the minimum increments otherwise appropriate to the individual legs of the order. Notwithstanding the foregoing sentence, bids and offers on complex orders in options on the S&P 500 Index (SPX) or on the S&P 100 Index (OEX and XEO), except for box/roll spreads, shall be expressed in decimal increments no smaller than $0.05 or in any increment, as determined by the Exchange on a class-by-class basis and announced to the Trading Permit Holders via Regulatory Circular. In addition:
(a) The legs of a complex order may be executed in $0.01 increments; and
(b) complex orders are subject to special priority requirements as described in Rules 6.45, 6.53C, 24.19 and 24.20.
Approved September 30, 1994 (93-54); amended March 9, 1998 (97-49); August 7, 2000 (00-07); April 11, 2002 (01-62); July 29, 2002 (02-02); March 21, 2006 (06-15); July 12, 2006 (05-65); November 8, 2006 (06-83); January 23, 2007 (06-92); September 27, 2007 (07-98); January 9, 2008 (08-01); May 23, 2008 (08-02); October 22, 2009 (09-076); February 3, 2010 (10-009); June 18, 2010 (10-058); November 29, 2010 (10-102); December 15, 2011 (11-118); June 22, 2012 (12-059); December 21, 2012 (12-127); February 8, 2013 (12-120); June 4, 2013 (13-061); November 22, 2013 (13-093); December 12, 2013 (13-124); June 22, 2014 (14-047); December 12, 2014 (14-086); June 17, 2015 (15-060); June 1, 2016 (16-048); November 23, 2016 (16-083); February 17, 2017 (16-091); January 24, 2017 (17-009).
. . . Interpretations and Policies:
.01 For purposes of this rule, "complex order" means a spread, straddle, combination or ratio order as defined in Rule 6.53, a stock-option order as defined in Rule 1.1(ii), a security future-option order as defined in Rule 1.1(zz), or any other complex order as defined in Rule 6.53C.
Amended July 1, 1973; September 30, 1994 (93-54); March 9, 1998 (97-49); November 8, 2006 (06-83).
.02 For purposes of this rule, "box/roll spread" or "box spread" means an aggregation of positions in a long call option and short put option with the same exercise price ("buy side") coupled with a long put option and short call option with the same exercise price ("sell side") all of which have the same aggregate current underlying value, and are structured as either: (A) a "long box spread" in which the sell side exercise price exceeds the buy side exercise price or (B) a "short box spread" in which the buy side exercise price exceeds the sell side exercise price.
Approved April 11, 2002 (01-62); amended November 8, 2006 (06-83); January 9, 2008 (08-01).
.03 For so long as SPDR options (SPY) and options on Diamonds (DIA) participate in the Penny Pilot Program, the minimum increments for Mini-SPX Index Options (XSP) shall be the same as SPY for all options series (including LEAPS) and for options on the Dow Jones Industrial Average (DJX) are $0.01 for all option series quoted below $3 (including LEAPS), and $0.05 for all option series $3 and above (including LEAPS).
Amended September 27, 2007 (07-98); July 31, 2013 (13-055).
.04 The minimum price variation for bids and offers for mini-options shall be determined in accordance with Interpretation and Policy .22(d) to Rule 5.5.
Approved March 12, 2013 (13-016).