Trading

Penny Increment

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Options priced in $0.01 increments for tighter spreads

What is Penny Increment?

Penny Increment A pricing format where options are quoted in $0.01 increments rather than the traditional $0.05 or $0.10. The penny pilot program covers many heavily traded options classes, resulting in tighter bid-ask spreads and lower transaction costs for traders. Options not in the penny program trade in wider $0.05 increments.

Complete Definition

A pricing format where options are quoted in $0.01 increments rather than the traditional $0.05 or $0.10. The penny pilot program covers many heavily traded options classes, resulting in tighter bid-ask spreads and lower transaction costs for traders. Options not in the penny program trade in wider $0.05 increments.

Related Terms

Bid Ask Spread Liquidity Cboe

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

Want to Learn More?

Explore our educational resources and analytics tools to deepen your understanding.

Learning Center

Payment for Order Flow (PFOF) All Terms Pin Risk

Learn Options Trading

Understanding Options Greeks Implied Volatility Guide How to Trade Options 0DTE Options Trading Options Glossary Strategy Guides Learning Center

Explore More Tools

Options Chain Real-time Greeks Greeks Heatmap Visual analysis Volatility Lab IV analysis Strategy Simulator Test strategies IV Intelligence 3D visualization Options Screener Find opportunities Historical Data Past snapshots Earnings Historical moves & IV 0DTE Analytics Same-day expiration