Archived CBOE, CBSX, & CFE Press Releases

FOR IMMEDIATE RELEASE    

CBOE TO LAUNCH S&P 500 ANNUAL DIVIDEND INDEX OPTIONS ON MAY 25:

Aimed at Customers Accustomed to Viewing Dividend Movement Over Entire Year  

 

CHICAGO, IL, May 13, 2010 - The Chicago Board Options Exchange (CBOE) today announced plans to begin trading options on the S&P 500® Annual Dividend Index (ticker symbol - DIVD) on Tuesday, May 25, 2010. Initially, two annual expirations - December 2010 and December 2011 - will be listed.

Introduction of S&P 500 Annual Dividend Index options will mark the second CBOE-exclusive dividend index options contract launched by the Exchange this year. On March 5, CBOE began trading in S&P 500 Quarterly Dividend Index options (ticker symbol - DVS) with a quarterly "accrual period," for market users with quarterly dividend exposures. DVS was the first contract of its kind in the U.S. 

The S&P 500 Annual Dividend Index options contract was designed for customers who are accustomed to looking at dividend movements over an entire year, versus on a quarter-by-quarter basis. Further, dividend index contracts created in Europe in recent years are also based on an annual accrual period.

Both of CBOE's S&P 500 Dividend Index options contracts provide direct exposure to the dividend risk of the S&P 500 index.  The options allow investors to capture the difference between forward implied dividends, the market's best estimate of future dividend payments, and realized dividends - the dividends that are actually paid over those periods.

The dividend indexes, calculated by Standard & Poor's, reflect ordinary cash dividends for corporations comprising the S&P 500 Index over either an annual or quarterly accrual period. Both the annual and quarterly S&P 500 Dividend Indexes are calculated using the same set of component securities, same shares outstanding, same capitalization-weighting methodology and same index divisor as are used to calculate the S&P 500 Index.

For DIVD, the annual accrual period runs from the business day after the December expiration through the December expiration one year later. For DVS, the quarterly accrual period runs from the business day after the March, June, September or December expiration through the third Friday of the next quarterly expiration month. At the end of the each accrual period, the Index is reset to zero, and a new accrual period begins.

Group One Trading, LP, has been named the Designated Primary Market Maker (DPM) for S&P 500 Annual Dividend Index options. It is also the DPM for S&P 500 Quarterly Dividend Index options.

For further information

For additional information on S&P 500 Annual Dividend Index options, including contract specifications, price charts, ticker symbols and frequently-asked questions, see www.cboe.com/DIVD.

Chicago Board Options Exchange (CBOE), the largest U.S. options exchange and creator of listed options, continues to set the bar for options trading through product innovation, trading technology and investor education. CBOE offers equity, index and ETF options, including proprietary products, such as S&P 500 options (SPX), the most active U.S. index option, and options on the CBOE Volatility Index (VIX), the world's barometer for market volatility. Other groundbreaking products engineered by CBOE include equity options, security index options, LEAPS, FLEX options, and benchmark products, such as the CBOE S&P 500 BuyWrite Index (BXM). CBOE's Hybrid Trading System incorporates electronic and open-outcry trading, enabling customers to choose their trading method.  CBOE's Hybrid is powered by CBOEdirect, a proprietary, state-of-the-art electronic platform that also supports the CBOE Futures Exchange (CFE), CBOE Stock Exchange (CBSX) and OneChicago. CBOE is home to the world-renowned Options Institute and www.cboe.com, named "Best of the Web" for options information and education.

CBOE is regulated by the Securities and Exchange Commission (SEC), with all trades cleared by the AAA-rated Options Clearing Corporation (OCC).   

Press contacts:

Gail Osten                                                                           

(312) 786-7123                                                  

osten@cboe.com 

Gary Compton 

(312) 786-7612  

comptong@cboe.com

CBOE®, Chicago Board Options Exchange®, CBOEdirect®, CBOE Volatility Index®, VIX®, FLEX®,, Hybrid®, LEAPS®, CBSX® and CBOE Stock Exchange® are registered trademarks of Chicago Board Options Exchange, Incorporated (CBOE).   SPXSM, BXMSM and The Options InstituteSM are service marks of CBOE.  CFE® is a registered trademark and CBOE Futures ExchangeSM is a service mark of CBOE Futures Exchange, LLC.    S&P®, and S&P 500® are registered trademarks of the McGraw-Hill Companies, Inc. and are licensed for use by CBOE. 

Standard & Poor's does not promote, market, sell or endorse any product based upon its indices.