If you've been paying attention, Citigroup opened up what are being called "half-strike options." Normally options on an underlying instrument will be struck on whole numbers, in increments of 10, 5, or 1, depending on how badly people want the stock to pin-- the actual reasoning behind strike selection has been written on old parchment, sealed with wax, and hidden deep in the depths of the OIC website.
Now last time I checked, $C was trading in the single digits. Yesterday's closing price was around 4 bucks, and the current average true range is around .125. While that may seem low in magnitude, the stock currently has a 20 day historical volatility of 37-- that's about as high as the HV of $AMZN.
But seriously, who trades these things? Exactly what rationale does one have with trading $C options on an active basis? The current November straddle has a whopping price of .28, so unless you work with a per-trade commission structure, you're probably not going to win a lot of battles in this name; and yet, the name on average trades over 400,000 contracts per day.
I feel that $C stock and options are an algorithmic playground. There's all sorts of arbitrage and high volume trading between circuits, not that there's anything wrong with that. The characteristic of trading $C is that it is a battle for pennies and nickels. That, coupled with the high volume on the options board, makes adding these half-strike options a compelling argument for those that make money off commissions. And they are probably giving the customer just what they wanted.
But remember, those customers aren't human.