In a January 18 Securities and Exchange Commission filing, the?BOX Options Exchange requested permission to trade “jumbo contracts” on the SPDR S&P 500 ETF Trust, (SPY), the most active ETF. These contracts are built on 1,000 shares of the SPY; this compares to most?contracts based on 100 shares.
With this offering, it will be approximately the same size as CBOE’s exclusive Standard & Poor?s 500 Index?options.?Should the SEC approve these?jumbo options, they will be allowed to trade on any venue, reported Bloomberg’s Nina Mehta.?
Edward Boyle, senior vice president of strategy for BOX Options, noted that the regulatory agency has acknowledged that contracts based on different share numbers makes sense for the industry’s different trading segments.?
Boyle said of the contracts via Bloomberg, ?It?s a product for which we?ve had demand from institutions. Institutions demand a higher notional value per contract than the current SPY offers. It will also be price-competitive since it will be available for multiple listing on all exchanges.?