Why are Trade King Options in multiples of .05?

Posted by The Otter Way on January 12, 2010 (12:36PM)

I've noticed that I'm restricted by multiples of .05 but I do see options trading in non .05!  I don't understand...

Posted by OldFart on January 12, 2010 (12:42PM)

it depends on the underlying. i just tried to sell MO Fed 19 puts for 0.12 and it went to the preview screen OK

Posted by The Otter Way on January 12, 2010 (12:47PM)

You have entered an invalid decimal value. Please re-enter in increments of $0.05.

This is what I get when attempting to bid/sell. 

Posted by OldFart on January 12, 2010 (12:50PM)

what is the underlying. is it part of the penny pilot?

Posted by Go White Sox on January 12, 2010 (12:51PM)

Otter -  some option are priced in pennies and other are in multiples of .05. I know WMT trades in pennies . Trade King had a link to the latest stocks option list a couple month ago.

Posted by The Otter Way on January 12, 2010 (12:55PM)

onty is the symbol... but i get the error message but I see 1.48 on onty e 5.00 stike.

Posted by Go White Sox on January 12, 2010 (12:55PM)

The Otter (other) reason you maybe seeing non nickle multiples is do to some one selling a contract between the bid and ask and the MM selling it, or buying it.

Posted by buydow on January 12, 2010 (12:57PM)

TOW,
This may help explain.

http://www.cboe.org/hybrid/pennypilot.aspx

Posted by The Otter Way on January 12, 2010 (01:19PM)

I like it when I can get so many answers from the SmartEEEEE Pant EEEEE's crowd... Thank you so very much for setting my path on the straight and narrow...

Many flippers to you and not the single digit.... Thanks...

Posted by buynhold on January 12, 2010 (03:34PM)

One interesting thing I have noticed--there are some stock options that you can only place orders in .05 increments on, but I have gotten filled at in-between increments.  I guess the market maker can do what he wants, but it is strange. E.G., I placed a buy limit for .75, didn't fill, then changed to .80, and got filled at .76.  oh well, I'm not complaining.

Posted by TampaJake on January 12, 2010 (05:28PM)

There are some options that you can only enter a price in .10 increments also.
Volume has a role in this. Heavily traded stocks may sell in pennies while others in .05 or .10 increments.

Posted by TampaJake on January 12, 2010 (05:30PM)

should have said....  Options on heavily traded stocks may sell in pennies while others in .05 or .10 increments.

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