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Equity Options Product Specifications


Each standard equity option covers 100 shares of the underlying security, which can include American Depository Shares ("ADS") or American Depository Receipts ("ADR"). Exercise or assignment of equity options results in acquisition or delivery of the underlying shares.

Unit of Trade

Each standard contract represents 100 shares of the underlying equity. Corporate actions, such as rights offerings, stock dividends, and mergers can result in adjusted contracts representing something other than 100 shares of stock.

Premium Quotations

Stated in points. One point equals $100.

Strike Price Intervals

In general, $2.50 increments for strikes below $25, $5 increments for those trading from $25 through $200, and $10 increments for strikes above $200. However, different exchange programs allow for strike-interval listing beyond the standard method.

Exercise Style

American-style. Options may be exercised on any business day up to and including the expiration date.

Exercise Settlement Time

Exercise notices tendered on any business day will result in delivery of the underlying stock on the second (T+2) business day following exercise.

Expiration Months

In general, two near-term months plus two additional months in the January, February or March quarterly cycle. However, different exchange programs allow for expiration-month listing beyond the standard method.

Expiration Dates

Monthly options expire on the third Friday of the expiration month.

Position Limits

Limits vary according to the number of outstanding shares and trading volume. The most active stocks have an option position limit of 250,000 contracts; smaller capitalization stocks may offer position limits of 200,000, 75,000, 50,000 or 25,000 contracts. Customer hedge exemptions are available.

Minimum Customer Margin

Purchases of puts or calls with nine months or less until expiration must be paid for in full. Writers of uncovered puts or calls must deposit / maintain 100% of the option proceeds* plus 20% of the aggregate contract value (current equity price x $100) minus the amount by which the option is out-of-the-money, if any, subject to a minimum for calls of option proceeds* plus 10% of the aggregate contract value and a minimum for puts of option proceeds* plus 10% of the aggregate exercise price amount.

(*For calculating maintenance margin, use the option's current market value instead of the option proceeds.)

Trading Hours

9:30 a.m. to 4:00 p.m. ET