Twitter Options Are Coming – But Not ‘Till Next Week (?)

We saw several announcements about Twitter (TWTR) options being listed a week from Friday, November 15th.  While that may be the date for options being listed at CBOE and other exchanges, we thought we’d explain to you about the listing process for options.

TWTR will have it’s IPO and tentatively begin trading shares on the NYSE this Thursday, November 7th.  Assuming that all goes well with the IPO, the process begins.  The exchanges and Options Clearing Corp (OCC) have a few items to verify before listing options.  For example, the number of shares in float, the amount of stock traded (should reach that easily with the IPO), and a few other minor requirements.

On the 6th business day of stock trading (this includes Thursday the 7th so the 6th business day would be Thursday November 14th), if all the requirements are met, the CBOE (and other exchanges wishing to list options on TWTR) would be expected to petition the OCC to add TWTR options.  The OCC would determine which Cycle (Jan-April, Feb-May or March-June), which strike prices would be listed and give approval to list options the following day, Friday November 15th.  This approval and listing procedure has been around for many years and has worked pretty smoothly.

Will their be TWTR Weeklys or LEAPS® options available?  Not right away, but if investors are looking for those products I’d think they could be added pretty quickly.  Will there be 1-point strikes or 2.50 point strikes?  I’m not sure, we will probably know the middle of next week.

So let’s see how the IPO goes Thursday the 7th.  If it goes well, Friday 11/15 is probably the first day to trade TWTR options.

2 Comments
Marty Kearney

Mr. Kearney began his long association with the CBOE when he became an independent Market Maker in early 1981. Mr. Kearney traded options full time on the trading floor until 1992 and periodically thereafter until 1996. In early 1992 he became a founding partner and Registered Options Principal of a brokerage firm based in…

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  • Drew E

    “On the 6th business day of stock trading (this includes Thursday the 7th so the 6th business day would be Thursday November 14th)…”

    Monday the 11th is a holiday, so the 6th trading day would actually be Friday November 15th.

    • Derek

      Veterans Day is not an NYSE holiday.