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Mini-options debut in five large names

Chris McKhann (chris.mckhann@optionmonster.com)

Today marks the start of trading in the new mini-options, which will give smaller traders access to contracts on some of the more expensive and popular stocks.

The mini-options will be one-tenth the size of regular options, so the costs will be dramatically lower. Five stocks will be available initially, all priced above $100.

The options will be offered on Apple (AAPL), Google (GOOG), Amazon (:AMZN), the SPDR Gold Fund (GLD), and the SPDR S&P 500 Fund (:SPY). This will likely expand quite quickly, as happened with the Weekly options.

Google is the most expensive of the group, and the cost reduction can clearly be seen in that name. Currently a one-month covered call trade in GOOG entails the purchase of 100 shares for $80,950 and the sale of one call for $2,600. But with the mini-options, you could buy 10 shares for $8,095 and sell the mini-call for $260.

While I am not sure who this will truly benefit from these contracts, it does provide retail investors with access to more expensive names.

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