Leveraging Mini Options for Small Portfolios

Some investors have a considerable amount of capital to work with when trading options, while many others are working with a smaller portfolio with limited capital. Investors who are just starting in options trading with a small balance or those who prefer to simply trade with lower amounts of capital might be interested in mini-options trading. It’s available on five stocks that feature mini options on the underlying—Amazon (AMZN), Apple (AAPL), Google (GOOG), SPDR Gold Trust (GLD), and the SPDR S&P 500 ETF Trust (SPY).

Right up front, we’d like to highlight a few of the primary challenges of participating in options trading with a small account.

• Mini options are more difficult to sell quickly while still retaining the value of the market price.
• E-minis are only available in five stocks.
• Transaction costs (commissions and fees) can destroy an investor’s minimal account balance if not managed properly.

Mini options might not be for everyone, so we wanted to clear up the main challenges that come with this kind of trading. However, for some investors, mini-options can provide flexibility, reduce risk, and increase accessibility. We’ll dive into the specifics of these benefits in our guide with focuses on how to best leverage mini options when using a smaller portfolio!

What Are Mini Options?

What are mini options? How can they benefit investors with limited resources or a smaller portfolio? We’ll get into the official definition of mini options, the history of their use, and a comparison of mini options to standard options.

Definition

Mini options are a type of options contract that covers 10 shares of an exchange-traded fund or underlying stock instead of the standard 100 shares. Some traders refer to mini options as “E-mini options.” Though they are only one-tenth the value of a standard contract, mini-options have the same strike price as standard options. They are most commonly listed on benchmark indexes where an E-mini index future is the underlying asset.

History

Mini options were introduced into the market in 2013 as a more affordable option for retail investors who often have less than 100 shares in an underlying position. Mini options make it easier for investors to trade options on high-priced securities but do so using a lot less money. In 2026, mini options are only available on the following stocks: Amazon (AMZN), Apple (AAPL), Google (GOOG), SPDR Gold Trust (GLD), and the SPDR S&P 500 ETF Trust (SPY).

Comparison Table

To give you an accurate snapshot of how mini options and standard options compare to one another, we’ve included the comparison table which outlines how different the experience is trading using one-tenth the amount you’d usually be using with standard options trading endeavors.

Benefits of Mini Options for Small Portfolios

Further in our guide, we’ll touch again on the drawbacks and limitations of trading using mini-options, but we’d like to take this time to outline the benefits and perks of using mini-options contracts on a smaller portfolio. There are a few ways where dealing with a smaller capital balance can work in your favor!

Affordability

One of the best benefits of mini options is that they require a much lower cash outlay, making them beneficial for investors who have smaller portfolios. The lower capital requirement makes it much easier and more realistic for traders with limited capital to enter options trades.

Risk Management

Because mini options come with smaller contract sizes, investors have reduced risk exposure. They aren’t putting up as much capital for each trade, so they carry much less risk than regular options contracts.

Flexibility

Using mini options makes things much easier for investors and traders to build diversified positions in smaller accounts. Mini options provide flexibility to make smaller trades on securities and it doesn’t matter what the share price is of the underlying stock. Using minis could be the difference between capitalizing on a lucrative trade or continuing to wait for the right opportunity to rise.

Accessibility

Mini options enable retail investors to trade and hedge options on high-priced stocks. This trading tool lets investors trade in smaller blocks—it’s great for those with limited capital, though it’s only available on a limited number of stocks.

How to Trade Mini Options Effectively

If you’re wondering how to begin the process of trading mini options on your options trading broker of choice, follow these simple steps to start. They might look a bit different going from one platform to the next, but they are the general directions to getting yourself involved in mini-options trading online.

• Step 1 — Identify stocks that offer mini options. A few examples include Amazon (AMZN), Google (GOOG), and Apple (AAPL).
• Step 2 — Select a trading strategy suitable for mini options. Investors can use covered calls or protective puts to effectively trade mini options to ensure a tidy profit.
• Step 3 — Evaluate market conditions and implied volatility. It’s key to consider these factors if you’re using different strategies like covered calls or cash-protective puts.
• Step 4 — Manage position sizing (never use any more than 1-2% of your capital for any one position) and monitor performance. Use orders like take-profits or stop-losses to effectively manage your positions and maximum potential returns.

Popular Strategies Using Mini Options

Trading mini options can be done using some of the popular strategies you find investors using when trading standard options contracts. Find out how using covered calls, protective puts, bearish or bullish spreads, strangles, and straddles can help you make trade mini options with great success.

Covered Calls

One of the best strategies to use when trading mini options is the covered call which ultimately helps investors generate income on a small portfolio. This additional income comes from the premiums received for selling a call option while limiting risk at the same time. The covered call involves the investor selling a call option on a stock they already own. This gives other traders the right to buy the shares at a specific price (strike price) by a certain time (the expiration date). The seller retains ownership of the stock because they have the necessary shares to fulfill the option if it’s exercised.

If the option is exercised, the investor can earn a premium from selling the call option. The premium is a small payment that the investor gets for giving someone the right to buy your shares at the strike price you set. Earning premiums through covered calls is ideal in sideways markets where you don’t expect the stock prices to move much.

There’s another scenario where the stock price rises significantly above the set strike price before expiration and the buyer of the call option has the right to buy your shares at the strike price. This means that those shares are called away (you won’t own them anymore) and you can no longer collect premiums on these shares because you’re obligated to sell them to the buyer. If the stock price falls below the strike price before expiration, the seller can still collect the premium even though the option will expire as worthless.

Protective Puts

A way for an investor to protect a small stock position against the stock price falling is to use a protective put where the investor buys a put option on a stock they already own. The protective puts essentially functions as an insurance policy against a market downturn. The protective put gives the investor or trader the right to sell the shares at a certain strike price when the stock falls below a certain point.

If the stock price takes a significant dip, the put grows in value which lets the investor offset some (or all) of their losses that come from selling the shares at the strike price.

Bullish/Bearish Spreads

Both bullish and bearish spreads are lower-cost directional trades with defined risk and they can be used effectively when trading mini options.

– Bullish Spreads: Sometimes called a “bull call spread” or a “bull put spread,” bullish spreads occur when an investor buys options at a lower strike price. At the same time, they also sell another option with the same expiration date but at a higher strike price. The idea behind the bullish spread is to profit from the underlying asset price rising, while also limiting losses through the use of the higher strike price. The maximum potential loss is the premium paid to begin the trade.
– Bearish Spreads: This trading strategy can be effective for mini options and involves buying an option with a higher strike price while also selling an option with a lower strike price (both have the same expiration date). It’s a technique that’s designed to profit when there’s a decline in the underlying asset’s price. The idea is to benefit from a downward market movement while simultaneously limiting potential losses. It can be used for calls (selling a lower strike call and buying a higher strike call) and puts (buying a higher strike price put and selling a lower strike put).

Straddles and Strangles

There are a few exciting ways for investors and traders to leverage mini options for volatility plays including straddles and strangles:

– Straddles: Investors employ the straddle strategy when they buy a call option and a put option on the same underlying security. It’s like predicting that the stock price will move significantly up or down before the expiration date. Mini options traders can take advantage of these large price fluctuations and it doesn’t even matter which way the market moves.

Long straddles involve the investor buying a call and a put option. They profit if the stock price goes well over the call option’s strike price or below the put option’s strike price.

Short straddles involve selling the call and out option. This generated income from the premiums. If the underlying security experiences considerable price volatility, however, the trader can be subject to larger losses than usual.

– Strangles: This technique involves the trader holding a call and putting on the same underlying asset. These trades have different strike prices, but the same expiration date. Investors can benefit from using a strangle when trading mini options by profiting if the underlying asset’s price moves considerably in either direction.

Strangles are profitable when the underlying asset’s price moves well beyond the strike prices of the call-and-put options. Long strangles occur when investors buy call-and-put options and benefit from a large price movement in either direction, while short strangles occur when the investors sell call-and-put options and profits when the underlying price stays within a narrow range.

Risks and Limitations of Mini Options

While there are several good reasons to trade using mini options, especially if you’re dealing with a smaller portfolio, trading mini options come with significant risks and limitations that are best to know ahead of time before diving in.

Liquidity Concerns

Because mini options have wider bid-ask spreads and smaller open interest, they have much lower liquidity compared to standard options contracts. Lower liquidity means that these options are more difficult to sell quickly without affecting their market price.

Limited Availability

There are only five stocks that feature mini options on the underlying. They include Amazon (AMZN), Apple (AAPL), Google (GOOG), SPDR Gold Trust (GLD), and the SPDR S&P 500 ETF Trust (SPY). Though mini options are available on benchmark indices, they aren’t available with many major companies. Because not all stocks have mini options, the possibilities for traders diversifying their investments are more limited than going with standard options contracts.

Transaction Costs

Because trading mini options deals with a lot less capital, transactional fees can become a big problem because too many of these can eat significantly into the limited funds that an investor is using. It’s key to look over all fees and commissions that are involved with any brokerage app you’re considering using to ensure that your balance is getting killed with the operational overhead involved with expenses.

Tips for Success When Using Mini Options

To effectively trade mini options online, there are a few steps you’ll want to take to experience success. When you’re dealing with a smaller balance and portfolio, there’s less room for error. Put these best practices into place when trading mini options to get the most you can out of the experience while minimizing potential losses and maximizing potential returns.

• Research First: The first best practice to put into place when trading mini options is to ensure the underlying stock aligns with your trading goals. Look at the risk-reward ratio with each trade as you establish a stop-loss limit and a price target. This ensures that you can responsibly manage your capital to maximize profits, even with a limited amount of capital.
• Start Small: Using mini-options is a good way to begin small as a way of testing the waters, especially if you aren’t super familiar with the rhythm and inner workings of mini-options trading. Slowly but surely, you can develop a diversified strategy by incrementally building your balance using limited capital.
• Leverage Technology: It’s best to use brokerage apps that not only offer mini-options contracts but also have the right tools for properly supporting mini-options efficiently. Websites and apps such as Interactive Brokers, Robinhood, and Charles Schwab are all great options for mini options. They have a long track record of helping investors with smaller portfolios, teaching them how to leverage mini options to their advantage.
• Educate Yourself: It’s best to stay updated on the mini options market and keep fresh on the best basic strategies for trading these smaller options contracts. Your brokerage app of choice will most likely have some kind of educational materials like articles or video content that goes extensively into how mini options work and which strategies work best for trading them. Keep yourself educated as best you can to experience success in mini-option trading.

Real-World Example—Using Mini Options

Let’s look at a real-world example of a mini options trade to give you a clearer idea of how they work for investors with smaller portfolios and cash balances. We’ll lay out the scenario which focuses on a hypothetical trade, show step-by-step how mini options would work in that particular case, and outline the outcome including the potential profits and risk as well as any relevant learning points.

Scenario

Let’s look at a hypothetical trade, a covered call on a stock priced at $200. The reason it’s called a covered call is because the trade already owns the underlying shares. In this case, the investor is selling a call option on 100 shares of that stock. The strike price is set around $200 to $205 because the stock is currently trading at $200. The covered call gives the other traders the right to buy shares at that price before the expiration date. The trade selling option can generate income from the premiums that come from the sale.

If the stock price rises significantly above the strike price, the seller is obligated to sell their shares at the strike price. The potential loss is limited to the difference between the stock price and the premium you get if the stock price falls.

Breakdown

Now let’s look at this trade where a covered call is being used on a stock worth $200 and show you step-by-step how mini options would work in this case. With mini options, you’re dealing with a tenth of a standard contract—the standard contract represents 100 shares and the mini contract represents 10 shares.

Instead of a stock price of $200, the mini options stock price will be $20. A strike price of $20 to $25 will be set instead of $200 to $250. The premium the seller makes on the contract is $20 instead of $200, which is the case for the standard 100-share contract.

Outcome

Now, let’s review the potential outcomes of a standard options trade with a traditional contract of 100 shares and a mini options trade with a contract of 10 shares.

Outcomes for Standard Options Trades

• Stock Price: $200
• Strike Price: $200-$205
• Premium: $200 (standard contract of 100 shares)
• Outcome 1: The stock price stays below $205 when the expiration date arrives. The call expires as worthless. The trader keeps the premium of $200.
• Outcome 2: The stock price goes over $205. What’s likely to happen is that the buyer of the call will exercise the right to buy those shares at $205. The seller is obligated to sell them, despite the market price being higher.

Outcomes for Mini Options Trades

• Stock Price: $20
• Strike Price: $20-$25
• Premium: $20 (mini contract of 10 shares)
• Outcome 1: The stock price stays below $25 when the expiration date arrives. The call expires as worthless. The trader keeps the premium of $20.
• Outcome 2: The stock price goes over $25. What’s likely to happen is that the buyer of the call will exercise the right to buy those shares at $25. The seller is obligated to sell them, despite the market price being higher.

Think About Your Trading Style and Goals before Trading Mini Options

Mini-option trading carries the benefit of allowing investors to trade high-priced securities for a small amount of capital, carrying less exposure to risk, and offering the investor flexibility and accessibility in trading. However, there are some risks like lower liquidity and the fact that they are only available on five stocks.

Trading mini options is a good choice for some investors and not so much for others—you have to consider your trading style, your taste for risk, and your overall investment goals. For those readers who have a smaller portfolio and limited capital, we’d encourage them to consider mini options as a stepping stone in their options trading journey.

For further reading or tools on mini options or standard options contracts, check out all of the resources we offer at OptionsTrading.org. It’s a great place to get started!

Frequently Asked Questions

For your convenience, we’ve included a section featuring the most common questions from customers and readers about mini-options trading. If you’re looking for some of the key highlights discussed in this guide, you can get a lot of the main ideas right here!

What Stocks Have Mini Options?

There are only five stocks that feature mini options on the underlying. They include Amazon (AMZN), Apple (AAPL), Google (GOOG), SPDR Gold Trust (GLD), and the SPDR S&P 500 ETF Trust (SPY).

Are Mini Options Good for Beginners?

Mini options are a good starting point for investors and traders who are still getting their feet wet. Mini options allow them to trade high-priced securities and do so using a smaller portfolio with limited capital. Another plus of mini options for new traders is that they can minimize potential losses with a limited balance and keep their risk exposure lower than they ever could by trading standard options contracts.

How Do Mini Options Differ from Standard Options?

Mini options are notable for being contracts that cover 10 shares of an exchange-traded fund or underlying stock instead of the standard 100 shares. Mini options have the same strike prices as standard options despite only containing one-tenth the value of a standard contract. Unlike standard contracts, mini options (or E-minis) can be found commonly listed on benchmark indexes where an E-mini index future is the underlying asset.

Can I Trade Mini Options on Any Brokerage Platform?

Investors can only trade mini options on certain platforms—many of the smaller brokerage apps don’t offer these products to their customers. You’ll find mini options offered on platforms like Interactive Brokers, Charles Schwab, Robinhood, and many of the other online options brokers. If you’re interested in trading with these smaller portfolio products, it’s best to check each app or website ahead of time to see if they deal in mini options.