www.amex.com/amextrader
Overview
Beginning in January 2007, the Exchange participated in an industry wide pilot program (Penny Pilot Program or Pilot) in which the minimum price variations (MPV's) were reduced. Currently, most options are traded with MPV's of $0.05 for premiums below $3.00 and $0.10 for premiums above $3.00. The Pilot reduced the MPV's to $0.01 for premiums below $3.00 and $0.05 for premiums above $3.00. The one exception to this was for options on Powershares QQQ Trust (QQQQ) where all options, regardless of premium, were able to be quoted and traded with MPV's of $0.01. The Pilot was scheduled to run for 6 months until July 26, 2007.
Update As Of March 27, 2008
The Pilot has been expanded further to include an additional 28 names beginning on March 28, 2008. These names will be quoted and traded in $0.01 MPV's for premiums below $3.00 and $0.05 MPV's for premiums above $3.00. The 28 additional Pilot securities are listed below:
| Underlying Name | Underlying Symbol | Underlying Name | Underlying Symbol |
|---|---|---|---|
| Alcoa, Inc. | AA | Lehman Brothers Holdings Inc. | LEH |
| American International Group, Inc. | AIG | Merrill Lynch & Co., Inc. | MER |
| Bank of America Corporation | BAC | Mini-Nasdaq 100 Index | MNX |
| The Bear Stearns Companies, Inc. | BSC | Newmont Mining Corp. | NEM |
| Countrywide Financial Corp. | CFC | Pfizer Inc. | PFE |
| Dell Inc. | DELL | Companhia Vale do Rio Doce ADS | RIO |
| eBay Inc. | EBAY | Starbucks Corporation | SBUX |
| iShares MSCI Emerging Markets IndexFund | EEM | SanDisk Corp. | SNDK |
| EMC Corporation | EMC | Target Corp. | TGT |
| Ford Motor Co. | F | Valero Energy Corp. | VLO |
| Goldman Sachs Group, Inc. | GS | Verizon Communications Inc. | VZ |
| Halliburton Company | HAL | Washington Mutual Inc. | WM |
| Home Depot, Inc. | HD | Wal-Mart Stores, Inc. | WMT |
| JP Morgan Chase & Co. | JPM | Exxon Mobil Corp. | XOM |
Update As Of July 26, 2007
Each of the exchanges submitted feedback to the SEC regarding the impact of the Pilot. Go here (Penny Pilot Report) for a copy of the Amex's report. The exchanges and the SEC have determined to extend the existing Pilot until September 27, 2007. Subsequently, the Pilot will be expanded in 2 phases. The first phase would begin on September 28, 2007 and would continue for 6 months until March 27, 2008. This first phase would seek to add 22 underlying securities that are among the more actively traded options and together with the initial 13 Pilot securities would represent approximately 35% of total industry volume. Those 22 additional securities are as follows:
| Underlying Name | Underlying Symbol | Underlying Name | Underlying Symbol |
|---|---|---|---|
| SPDR S&P 500 | SPY | NYSE Euronext | NYX |
| Apple Inc. | AAPL | Cisco Systems | CSCO |
| Altria Group, Inc. | MO | Financial Select Sector SPDR | XLF |
| Dendreon Corp. | DNDN | AT&T, Inc. | T |
| Amgen Inc. | AMGN | Citigroup, Inc. | C |
| Yahoo! Inc. | YHOO | Amazon.com Inc. | AMZN |
| Qualcomm Inc. | QCOM | Motorola Inc. | MOT |
| General Motors | GM | Research In Motion Ltd. | RIMM |
| Energy Select Sector SPDR | XLE | Freeport-McMoran Copper & Gold, Inc. | FCX |
| Diamonds Trust | DIA | ConocoPhillips | COP |
| Oil Services HOLDRs | OIH | Bristol-Myers Squibb Co. | BMY |
The MPV's for these securities will be $0.01 for premiums below $3.00 and $0.05 for premiums above $3.00. The MPV's for the existing 13 Pilot securities will be the same with the exception of QQQQ which will continue to have $0.01 MPV's regardless of premium.
The second phase of the Pilot expansion would occur on March 28, 2008 at which time it is anticipated that the Pilot would be expanded to include an additional 28 securities from among the most active options, bringing the total number of securities in the Pilot to 63. The Pilot would then continue until March 28, 2009.
This information is subject to change as throughout the Pilot the exchanges will be submitting periodic reports in which they will provide feedback to the SEC regarding the impact of the Pilot. Based on this feedback the manner in which the Pilot is expanded may deviate from the proposal described above. As changes are made, the Amex will seek to keep this information current.
Rollout Schedule for Original 13 Pilot Securities
The 13 securities selected for the Penny Pilot Program are listed below with each security's anticipated start date.
| Underlying Symbol | Underlying Name | Anticipated Start Date |
|---|---|---|
| WFMI | Whole Foods Market Inc | January 26, 2007 |
| GE | General Electric Company | February 2, 2007 |
| MSFT | Microsoft Corporation | February 2, 2007 |
| A | Agilent Tech Inc | February 9, 2007 |
| AMD | Advanced Micro Devices Inc | February 9, 2007 |
| CAT | Caterpillar Inc | February 9, 2007 |
| FLEX | Flextronics International Ltd | February 9, 2007 |
| INTC | Intel Corporation | February 9, 2007 |
| IWM | iShares Russell 2000 Index Fund | February 9, 2007 |
| QQQQ | Nasdaq-100 Index Tracking Stock | February 9, 2007 |
| SMH | Semiconductor HOLDRS | February 9, 2007 |
| SUNW | Sun Microsystems Inc | February 9, 2007 |
| TXN | Texas Instruments Inc | February 9, 2007 |
Rule Filings
To view a copy of the Amex rule filing concerning its' participation in the Penny Pilot Program, click on the File Number in the table below.
| File Number | Date Filed | Description | ||
|---|---|---|---|---|
| SR Amex 2007-73 | 07/18/07 | Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Extension of the iShares Russell 2000 Index Fund Option Pilot Program until January 18, 2008. | ||
| SR Amex 2006-106 | 11/09/06 | Proposal to adopt a Penny Quoting Pilot Program for a limited number of options classes. | ||
Testing Information
Click on the document in the table below to access details on testing for the Penny Pilot Program with the Amex.
Contact Information
For further information, contact pennypilot@amex.com or call 1-800-THE-AMEX.