Penny Pricing Comes to Options Market

Better prices, lower transaction costs and quicker execution are some of the benefits that officials hope customers will see.

Among the exchanges and brokers, one of the biggest worries is that this pilot program will become a stealth phase in mandating trading in pennies for all listed options.

"I think certain products like the QQQQ's are well suited and will see not only an explosion in volume, but be a benefit to all parties," says Bottini. But for the less-active issues, it might not make sense, and he hopes the Securities and Exchange Commission "gets fully engaged with the industry in establishing parameters," such as minimum volume for which issues will trade in pennies.

In the end, as always, the supply and demand of the markets will determine where and to what extent penny trading is needed and economically useful.