When you enter your options orders at Alpaca it is important to know how your order will be handled and how the options market works.
Most option contracts are quoted in the below increments:
| Options Price | Increment |
|---|---|
| Less than $3 | .05 |
| At or above $3 | .10 |
There are three board-based ETFs that are all quoted in penny increments, if the underlying equity on the option contract is SPY, QQQ, or IWM you can enter your limits in penny increments regardless of price.
Options Penny Pilot
There is currently an industry-wide pilot program that allows quoting and trading of option classes in penny increments. This is called the âPenny Interval Programâ or the âPenny Programâ. The program allows orders to be entered in the below increments:
| Option Price | Increment |
|---|---|
| Less than $3 | .01 |
| At or above $3 | .05 |
You can find if a symbol is in the Options Penny Pilot by checking API.
Please see https://docs.alpaca.markets/reference/get-options-contracts
In the response of the GET /options/contracts endpoint, there will be a field called "ppind" (true/false)
Order Handling and Nasdaq Options Market (NOM)
The Nasdaq Options Market is unique in quoting all options series in penny increments. If you enter a limit order at Alpaca and it is not in line with the above limit order increments Alpacaâs execution partners will attempt to route the order to the NOM. If they are not able to route the order to NOM the order will be rejected.
For example, if you are attempting to enter an order to buy a call on an equity and you input a limit price of 7.07 the order will be routed to the NOM and be represented on their books. If you do this you may see trades better than your price on other options venues. We suggest that you use limit prices that are in line with the price increments of the option as stated above.
Limit and Stop Decimal Precision on Options Orders
If you attempt to enter a limit or stop price with a value with three or more decimals the order will be rejected.