SEC Watching Options Take Fees
Traders Magazine, June, 2008 by Nina Mehta
The Securities and Exchange Commission, in the wake of concerns raised by options exchanges and traders, won't permit options exchanges to charge access fees over a certain limit.
"We're certainly not fond of take fees that cross the increment," said Erik Sirri, director of the SEC's Division of Trading and Markets, referring to the minimum allowable quoting increment for options. If the fee crosses the increment, Sirri added, "that would be an issue."
That puts the limit, effectively, at $1 per contract for options quoted in pennies. The minimum increment for options in the penny pilot that are quoted under $3 is now 1 cent. Since execution fees are charged on a per-contract basis, while premiums are quoted on a per-share basis, that equates to a $1 transaction...
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