The Cboe Exchange, Inc. has proposed a rule change to allow the listing and trading of index options with a smaller index multiplier of one, known as "micro-options." This change aims to make it easier for retail investors to access the market by providing lower-priced options, reflecting 1/100th of the value of current index options. The micro-options are designed to expand investor choices by allowing more precise hedging strategies, especially for smaller investments. The Securities and Exchange Commission (SEC) is inviting public comments on this proposal to evaluate its impact and ensure it aligns with the rules of the Securities Exchange Act of 1934.
Simple Explanation
The Cboe Exchange wants to make it easier and cheaper for people to buy smaller pieces of stock options called "micro-options," so even small investors can join in and protect their money better. The SEC is asking people what they think about this idea to make sure it's fair and good for everyone.