MIAX Pushes for Trading Tiny Micro Stock Index Options
Published Date: 7/8/2025
Notice
Summary
Miami International Securities Exchange (MIAX) wants to start listing and trading options on tiny, focused stock groups called micro narrow-based indexes. This change means investors can trade smaller, more precise index options with new rules on limits and maintenance. The SEC is reviewing this proposal, and if approved, it could open fresh trading opportunities soon without big cost changes.
Analyzed Economic Effects
6 provisions identified: 6 benefits, 0 costs, 0 mixed.
Numeric Listing Thresholds for Index Components
To qualify as a micro narrow-based index, an index must meet specific numeric tests such as having nine or fewer component securities or meeting component-weight tests, each component having at least $75,000,000 market capitalization (with certain lowest-weighted exceptions at $50,000,000), and six-month average daily trading volume thresholds (e.g., at least 45,500 shares per component, with some lowest-weighted exceptions at 22,750 shares).
Position and Exercise Limits Adopted
MIAX proposes position limits for micro narrow-based index options by incorporating applicable Cboe rules and sets exercise limits equal to the position limits for the nearest expiration. It also states that ten reduced-value contracts equal one full-value contract for aggregation.
MIAX to List Micro Narrow Index Options
MIAX proposes rules to allow the Exchange to list and trade options on "micro narrow-based" indexes. The change was filed June 25, 2025 and would add a new classification and related rules (definitions, listing, maintenance, position and exercise limits) to MIAX's index options rulebook.
Faster Price Reporting and A.M. Settlement
The proposed rules require the current underlying index value to be reported at least once every 15 seconds while the index options trade, and cash-settled index options are designated as A.M.-settled. These steps are intended to increase transparency and reduce settlement-related market impact.
MIAX May List Without Separate SEC Filing
MIAX proposes amending Rule 1802(a) to add a cross-reference so that classes of options on micro narrow-based indexes may be traded pursuant to Rule 19b-4(e) of the Exchange Act without a separate Section 19(b) proposed rule change if the initial listing standards in Rule 1802(f) are met.
Surveillance and Intermarket Coordination
MIAX represents it will apply real-time and post-trade surveillance to micro narrow-based index options and will coordinate with the Intermarket Surveillance Group (ISG) and FINRA (via a 17d-2 plan) to obtain market information from other markets and affiliates for monitoring and enforcement.
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