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Whats the formula for determining strike price intervals in options.?

April 26, 2017Business determining Finance Formula intervals Investing Options strike price

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Whats the formula for determining strike price intervals in options.?

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For equity options, the usual formula given by the Options Clearing Corporation (OCC) is “Strike Price Intervals: 2-1/2 points for stocks trading below $25, 5 points for those trading from $25 to $200, and 10 points for those trading above $200.” However, the usually formula is not always used. Some lower priced stocks use $1 intervals. Strike prices may be adjusted due to splits, mergers, spin-offs, or special dividends. Finally, anyone can ask for an additional strike price to be added. With all the exceptions any formula would be inaccurate some of the time. To get accurate information you need to get an options chain from reliable source, such as the CBOE, and extract the strike prices from the results.