The Boston Options Exchange (BOX ) has received approval from the US Securities and Exchange Commission (SEC) to offer a new range of options contracts, Jumbo SPY, to its customers.
SPDR S&P 500 ETF (SPY) is one of the most widely recognised exchange-traded funds (ETF) in the US and Jumbo SPY options overlie 1,000 SPY ETF shares per contract, compared to 100 shares per contract for standard options.
"Jumbo SPY creates both fee and price competition across ETFs and index products and gives market makers another tool to hedge their portfolios," said Tony McCormick, chief executive of BOX.
Jumbo 1,000 share SPY contracts are designed for institutions and customers who are seeking higher notional value and the physical settlement that ETF options offer.
"The Jumbo SPY is attractive for institutional traders who prefer larger-sized contracts as it gives them the ability to buy and sell without moving through price points in the market," said Ed Boyle, senior vice president of strategy at BOX.
BOX expects to start trading Jumbo SPY on Friday 10 May.