To The Moon

The U.S. Securities and Exchange Commission (SEC) has formally approved Nasdaq ISE's proposed rule change. Effective January 26, 2026, options on nine "mega-cap" company stocks and ETFs with top-tier market capitalization and liquidity will be added to the "Short Term Option Series (STO) Program," introducing new Monday and Wednesday short-term expiration dates. This move aims to provide traders with more flexible hedging and speculative tools while implementing stringent risk control requirements.

Which 'Giants' Are Included in the New Program? (Q1 2026 List)

According to the official Nasdaq list for Q1 2026, the following nine securities are the inaugural "Qualifying Securities":

• Tesla, Inc. (TSLA) $Tesla Motors(TSLA)$

• NVIDIA Corporation (NVDA) $NVIDIA(NVDA)$

• Apple Inc. (AAPL) $Apple(AAPL)$

• iShares Bitcoin Trust ETF (IBIT) $iShares Bitcoin Trust(IBIT)$

• Amazon.com, Inc. (AMZN) $Amazon.com(AMZN)$

• Meta Platforms, Inc. (META) $Meta Platforms, Inc.(META)$

• Broadcom Inc. (AVGO) $Broadcom(AVGO)$

• Alphabet Inc. (GOOGL) $Alphabet(GOOGL)$

• Microsoft Corporation (MSFT) $Microsoft(MSFT)$

Please Note: This is a dynamic list that will be reviewed and updated quarterly. Securities that no longer meet the latest criteria will be removed, and newly qualifying ones will be added. Investors should closely monitor quarterly announcements on the Nasdaq website.

What is the Short Term Option Series Program?

This is an existing exchange rule that allows the listing of option contracts with shorter durations than standard monthly options on specific, highly liquid underlying securities. Previously, the program already permitted the listing of short-term options for Mondays through Thursdays of the next two weeks for certain symbols.
The core of this amendment is: To additionally introduce up to two Monday and Wednesday expiration dates (i.e., Mondays and Wednesdays within the two weeks following the current week) for the aforementioned "Qualifying Securities," providing traders with a denser selection of short-term expirations.

'Qualifying Securities' Screening Criteria

To be included, a security must meet all of the following "hard metrics" on a quarterly basis:

1. Mega Size:

   • Individual Stock: Market capitalization > $700 billion.

   • ETF: Assets Under Management (AUM) > $50 billion.

2. Extremely High Liquidity: Monthly options volume > 10 million contracts (sides traded).

3. Sufficient Capacity: Options position limit ≥ 250,000 contracts.

4. Fine Pricing: Participation in the Penny Interval Program (typically referring to a minimum price increment of $0.01).

These criteria ensure that the new short-term options are only introduced on the most deep and liquid "behemoth" securities, aiming to control overall market impact.

Key Risk Controls & Trading Rules

1. Avoiding Earnings Volatility: New Monday/Wednesday expirations are absolutely prohibited from being listed on a day when there will be an official earnings announcement after the market close. This is to avoid the exercise/assignment risk associated with significant post-earnings price volatility.

2. Non-Consecutive Listing: If a planned Monday or Wednesday expiration date conflicts with a standard monthly or quarterly option expiration, listing for that week is skipped and moved to the following week. This ensures the new expirations do not coincide with large-scale expiration events.

3. P.M. Settlement: These new Monday/Wednesday short-term options, like existing short-term options, are P.M.-settled. The settlement price is based on the closing price of the underlying security during the regular trading session (4:00 p.m. ET) on the expiration date.

4. Risk Warning: The SEC and the exchange emphasize that traders must be fully aware of the risks associated with the post-market trading window from 4:00 p.m. to 5:30 p.m. ET. Option holders may face unexpected in-the-money exercises or out-of-the-money assignments due to post-close price movements. Broker-dealers are responsible for ensuring their clients understand this risk.

Other Important Implications for Options Traders

1. More Strategic Choices: The denser short-term expirations provide more tools for Gamma trading, event-driven hedging, and more precise Theta (time decay) strategies.

2. Cost and Hedging Flexibility: Theoretically, shorter-term options may offer lower-cost near-term risk protection.

3. Applicability Across Nasdaq Platform: This rule was initiated by Nasdaq ISE but, through rule incorporation by reference, applies equally to all Nasdaq-owned options exchanges: Nasdaq Phlx, BX, NOM, GEMX, and MRX.

This rule amendment responds to growing market demand for shorter-dated derivatives, creating new opportunities for active traders while testing the risk management capabilities of all market participants.