Options on newly issued stocks can start trading when they meet standards set by the options exchanges. At the CBOE, for example, a spokeswoman outlines the rules as follows:
· Minimum of 7,000,000 shares of the underlying security must be owned by people other than officers, directors and shareholders with more than 10 percent of the stock.
· Minimum of 2,000 stockholders
· Trading volume has been at least 2,400,000 shares in the preceding 12 months — i.e., it needs to reach cumulative trading volume of 2,400,000. If they hit that volume level in a day, or two, or three, that would qualify.
· Market price per share has been at least $3.00 for the previous five consecutive business days preceding the date on which a certificate is submitted to the Options Clearing Corporation for listing and trading.
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