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BOX Options Exchange is seeking regulatory approval to implement "jumbo" sized contracts on the widely traded SPDR S&P 500 ETF (NYSEARCA:SPY).

The exchange wants to trade 1,000 share contracts on SPY, according to an SEC filing. The jumbo options would be traded on any venue if approved.

In contrast, most contracts are based on 100 shares, reports Nina Mehta for Bloomberg. The BOX Options Exchange's proposed contracts would be about the same size as S&P 500 Index options traded exclusively on the Chicago Board Options Exchange.

"It's a product for which we've had demand from institutions," Edward Boyle, senior vice president of strategy for BOX Options, said in the Bloomberg article. "Institutions demand a higher notional value per contract than the current SPY offers. It will also be price-competitive since it will be available for multiple listing on all exchanges."

Boyle also pointed out that the SEC recognizes that contracts of varying sizes makes sense for different areas of the trading industry. For instance, institutional buyers prefer larger-sized contracts to buy or sell positions without showing their hand and moving the market.

However, the jumbo-size contracts could come with wider bid/ask spreads than similar normal-size contracts.

Meanwhile, exchanges are preparing to enact "mini" options on five securities that are over $100, including SPY, Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL), for investors to speculate or hedge with 10 share contracts.

"In 2013 there's significantly more demand for options than in the late 1990s," Michael Bickford, a principal at TYJS Group LLC, said in the article. "There's more of an audience for options in general and there's more institutional demand than there was back then."

Max Chen contributed to this article.

Disclosure: I am long SPY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.