Who sets the width between the bid-ask on the options exchanges?
Basically, anyone who trades does! However, there are rules on each exchange regarding the maximum width that those quotes may be. Generally speaking, the maximum bid/ask differentials are the same at the exchanges that trade options. Please be aware that there are occasions and market situations on the various trading floors that may necessitate the maximum bid ask differentials can be modified or waived. The 6 US options exchanges that list options have rules that specify the maximum bid ask differentials in option contracts. The members of these exchanges are obligated, under normal circumstances, to honor their displayed quote for a minimum number of contracts. The number of contracts can vary, depending on the stock or index in question, but it is usually at least 10 contracts, and in many circumstances could be 20, 50 or even 250 contracts! For example, if a stock offered 8 different strikes per month, you could say that there are 64 different contracts available (8 calls, 8 puts
