Strategies

The Index Strategy Workshop is designed to assist individuals in learning about various index option strategies. These discussions and materials are for educational purposes only and are not intended to provide investment advice. For the sake of simplicity, taxes, commissions and other trading costs have been omitted from the discussions and strategies. These should be taken into account when making investment decisions. These strategies are based on hypothetical situations involving a European-style, cash-settled index and should only be considered as examples of potential trading approaches. The inclusion of advertisements on CBOE's website should not be construed as an endorsement of any product, service, or website or as an indication of the value of any claims, recommendations, or other information contained therein.

Access to, or delivery of a copy of, the Options Disclosure Document must accompany this worksheet.

 

SPX: Standard and Poor’s 500® Index

The Standard & Poor’s 500 Index (SPX) is a capitalization-weighted index of 500 blue chip, large cap stocks from the U.S equities marketplace that represent a broad range of industry sector groups. It is a broad market index; together these 500 stocks represent ap proximately 75% of the U.S. equity markets. The impact of a price change in any component stock on the level of the overall index is proportional to the issue’s total market value. The S&P 500 has become the world’s leading benchmark for institutional investors, and so is widely quoted.



Summary of SPX Index Option Contract Specifications

Underlying Index
Standard & Poor’s 500 Index (SPX)

Multiplier
$100: contract size = $100 x SPX index level

Exercise Style
European: they may generally be exercised only on the last business day before expiration.

Expiration Date
The Saturday immediately following the third Friday of the expiration month

Settlement
AM-settled: the exercise settlement value is calculated using the first (opening) reported sales price in the primary market of each component security on the last business day (usually a Friday) before the expiration date. The cash settlement amount is equal to the difference between the exercise settlement value and the exercise (strike) price of the option, multiplied by $100. Exercise will result in delivery of cash on the business day following expiration.

Exercise Settlement Value
Disseminated with symbol SET

Last Trading Day
Trading of expiring contracts will ordinarily cease on the business day (usually a Thursday) preceding the day on which the exercise settlement value is calculated.

Trading Hours
8:30 a.m. to 3:15 p.m. Central Time (Chicago time)

For more information about the SPX index and SPX index options click here.

 

  
 

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Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606. The information on this website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the website information. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. The inclusion of non-CBOE advertisements on the website should not be construed as an endorsement or an indication of the value of any product, service, or website. The Terms and Conditions govern use of this website and use of this website will be deemed acceptance of those Terms and Conditions.