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Mini option

A contract covering 10 shares instead of 100, letting small accounts trade high-priced stock without a full-size position.

Minis were introduced so that a trader with a few thousand dollars could write a covered-call against 10 shares of a very expensive stock. The options-multiplier is 10, so every quoted dollar of premium is worth $10 rather than $100.

In practice most mini series died from lack of volume, and the market solved the same problem with fractional shares and cheap ETFs. You still meet the multiplier idea whenever you trade an adjusted-option or a non-standard deliverable.

Example: a stock at $900. A standard covered call needs $90,000 of shares. A mini needs $9,000. Selling a $2.00 mini call collects $20, not $200 — an easy and expensive thing to misread on a confirmation.

Related: options-multiplier, deliverable, covered-call

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Payoff of a long call at expiryA flat loss equal to the premium below the strike, turning upward at 45 degrees above it.Profit / loss per share08595115125Strike 105Max loss 3 — the premium paidBreakeven 108Profit keeps growingUnderlying price at expiry
Buying a call: payoff at expiry. A 105-strike call bought for 3 loses that whole 3 if the price finishes at or below 105, breaks even at 108, then gains a dollar for every dollar higher. The loss is capped at the premium; the upside is not capped.

Educational only, not advice. Spotted an error? Post in Site Feedback.