Mini Russell 2000 Index options

From MarketsWiki

On the equity options side, the CBOE, International Securities Exchange and PHLX all list cash-settled Mini-Russell 2000 Index options (RMN). These contracts are based on 1/10 of the full-sized Russell 2000 Index options (RUT) offered on all six U.S. options exchanges.^[1].

The index itself is designed to measure the performance of the bottom 2,000 companies from a universe of the 3,000 largest stocks in the U.S. This index is capitalization-weighted and includes only common stocks belonging to corporations domiciled in the U.S. and its territories that are traded on the NYSE, NASDAQ or AMEX. The Russell 2000 Index is adjusted once per year, in June, to reflect changes in rankings and shares outstanding.

Because these contracts are fungible, contract specifications at these exchanges mirror one another.

PRODUCT SPECIFICATIONS

Symbol: RMN

Index Multiplier : 100

Price Interval: Strike price intervals are at least $2.50 for certain near-the-money series in near-term expiration months when Russell 2000 Index is at a level below 200, and 5 point strike price intervals for other options series with expirations up to one year, and at least 10 point strike price intervals for longer-term options.

Minimum Trading Increments: The minimum trading increment for an options contract trading at less than $3.00 is $0.05. The minimum trading increment for an options contract trading at $3.00 or higher is $0.10.

Expiration Date : Saturday following the third Friday of the expiration month.

Expiration Months : Up to three near-term months followed by three additional months from the March quarterly cycle (March, June, September and December).

Exercise Style : European

Last Trading Day : Trading in RMN options will ordinarily cease on the business day (usually a Thursday) preceding the day on which the exercise-settlement value is calculated.

Settlement Type : A.M., cash settlement

Settlement Value: The exercise-settlement value, RMU, is calculated using the opening (first) reported sales price in the primary market of each component stock on the last business day before the expiration. In the event that a stock in the index does not open on the day the exercise-settlement value is determined, the last reported sale price in the primary market will be used in calculating the exercise- settlement value. The exercise-settlement amount is equal to the difference between the exercise-settlement value, RMU, and the exercise price of the option, multiplied by $100. Exercise will result in delivery of cash on the business day following expiration.

Position and Exercise Limits: The aggregate position and exercise limits are 50,000 Full Value contracts on the same side of the market with no more than 30,000 in the near-term month. 10 Reduced Value contracts are the equivalent to 1 Full Value contract. An index option hedge exemption for public customers may be available for certain diversified portfolios, which may expand the position limit up to an additional 75,000 contracts. In addition, proprietary accounts of members may receive an exemption up to 100,000 contracts for the purpose of facilitation public customer orders. Position and Exercise limits are subject to change.

Trading Hours : 9:30 A.M. - 4:15 P.M. Eastern Time (New York time).