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Week 1 Review of CBOE Mini Options

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Stock quotes in this article: SPY, AAPL, GLD

The new 10-contract mini options are off to a very good start, with more than 54,000 puts and 47,000 calls trading in the first four days of listing, and total open interest going from zero to 71,000 contracts.

Mix of volume across the 5 listed products is similar to the mix among the same 'full size' options, with SPDR S&P 500 ETF (SPY) leading the list, followed by Apple (AAPL) and SPDR Gold ETF (GLD).

Mini Option Mix vs. Full Size Mix
Source: Trade Alert


As Skip noted this week , mini's are expected to attract more retail flow than institutional, and therefore may provide a more specific measure of investor sentiment than the mix of institutional and retail seen in full-sized contracts. I agree with Skip and look forward to further growth in the Minis for their informational content.

Surprisingly, we've seen large trades in the minis, especially the ultra liquid SPY.

 

Top Mini Options Trades
Source: Trade Alert


Those 1,000 lots on BATS (where minis have zero fees for the moment) could have been done as 10 lots in the normal SPY contract (or a single SPX contract), for the same economic trade. We may be seeing some mini-boosters taking advantage of the fee difference, or possibly some new participants that are simply more comfortable with the new contract size. Unfortunately I doubt retail clients can take advantage of the BATS fee cut, because I have not yet seen any brokers cut the customer commission side of the equation. Stay tuned!

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