Q: Why do some stocks have options for trading while others don't?

A: To have options on their stock traded on options exchanges, companies must meet the following criterias.

  1. The company must have a mimimum of 7,000,000 publicly held shares outstanding.
  2. The stock must be listed on the NYSE, Nasdaq, AMEX or any national stock exchange..
  3. For the past 5 trading days, the closing price of the stock must have a minimum per share price for a majority of trading days. This means that IPO issues cannot have options traded on them until 5 days after the initial public offering date.
  4. There must be at least 2,000 shareholders in the company.

Option exchanges will not allow any option to be traded for a particular stock if the company fail to meet any of the above criteria.

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