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FINRA Proposes to Increase Positions Limits on Certain Options
Friday, July 17, 2020

On July 14, the Financial Industry Regulatory Authority (FINRA) filed a proposed rule change to amend Rule 2360 (Options) to increase position limits on options on certain exchange-traded funds. FINRA has indicated that increasing the position limits for conventional options subject to the proposed rule change could lead to a more liquid and competitive market for these options, which will benefit customers interested in these products.

Rule 2360(b)(3)(A)(iii) establishes position limits for conventional equity option contracts. FINRA is now proposing to amend the rule by adding new position limits for options on certain ETFs and increasing the existing position limits for other options on ETFs as indicated below.

Security Underlying Option 

Position Limit

The DIAMONDS Trust (DIA)

300,000 contracts

The Standard and Poor’s Depositary Receipts Trust (SPY)

3,600,000 contracts

The iShares Russell 2000 ETF (IWM)

1,000,000 contracts

The PowerShares QQQ Trust (QQQ)

1,800,000 contracts

The iShares MSCI Emerging Markets ETF (EEM)

1,000,000 contracts

iShares China Large-Cap ETF (FXI)

1,000,000 contracts

iShares MSCI EAFE ETF (EFA)

1,000,000 contracts

iShares MSCI Brazil Capped ETF (EWZ)

500,000 contracts

iShares 20+ Year Treasury Bond Fund ETF (TLT)

500,000 contracts

iShares MSCI Japan ETF (EWJ)

500,000 contracts

iShares iBoxx High Yield Corporate Bond Fund  (HYG)

500,000 contracts

Financial Select Sector SPDR Fund (XLF)

500,000 contracts

FINRA has filed the proposed rule change for immediate effectiveness.

The rule filing is available here.

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