Penny Increment

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.