FOR IMMEDIATE RELEASE
CBOE TO LIST S&P 500® DIVIDEND INDEX OPTIONS: Allows Market Participants to Take Positions On S&P 500 Dividend Changes for the First Time
CHICAGO, IL, December 11, 2009
- The Chicago Board Options (CBOE) today announced it has received Securities and Exchange Commission (SEC) approval to offer trading in options on the S&P 500® Dividend Index (ticker symbol - DVS). The first contract of its kind in the U.S., the S&P 500 Dividend Index option will be listed exclusively at CBOE.A launch date has not been finalized.
The S&P 500 Dividend Index, calculated by Standard & Poor's, represents the accumulated ex-dividend amounts of all S&P 500 Index component securities over a specified accrual period. Options on the S&P 500 Dividend Index will allow investors to directly hedge risks based on changes in the dividend-paying policies of stocks comprising the S&P 500 Index.Investors will have the ability to trade the difference between the expected ordinary cash ex-dividend amounts during a specified accrual period and the actual ex-dividend amounts over that time period.In addition, S&P 500 Dividend Index options will appeal to market makers who use dividend estimates when pricing options.
Because the S&P 500 Dividend Index is 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, DVS options can dovetail with trading of S&P 500 Index (SPX) options.Alternatively, the contract can be used independently to take a broad position on the direction of dividend payments of U.S. stocks.
"Until now there has been no index option for cumulative dividend changes on stocks in the S&P 500 and no way to either hedge risk on lower-than-expected dividends or pursue opportunities on the potential for rising dividends. Now, anyone who collects dividends or wants to trade based on the difference between realized and implied dividends will have an options contract available to register market sentiment," said CBOE Chairman and CEO William J. Brodsky.
Specified Accrual Period
CBOE is designating a quarterly accrual period that runs from the business day after the third Friday of a quarterly options expiration month (March, June, September or December) through the third Friday of the next quarterly options expiration month.The S&P 500 Dividend Index, which is expressed in S&P 500 Index points, will be reset to zero at the end of each quarterly period as defined above.
For additional information, please see www.cboe.com/DVS.
CBOE S&P 500 Dividend Index Options Contract Specification Overview
Underlying: Ten times the S&P 500 Dividend Index
Strike Price Intervals: Strike prices less than 200 may be listed in one-point ($1.00) intervals. When the strike price exceeds 200, strike price intervals will be no less than 2-1/2 points
Strike (Exercise) Prices: Initially, in-, at- and out-of-the-money strike prices are listed. New strikes added as the price of the related S&P 500 Dividend Index futures contract moves and upon request
Expiration Date: Saturday following the third Friday of the expiration month
Expiration Months: Up to 4 contract months from the March quarterly cycle (March, June, September and December).LEAPS will also be listed.
Last Trading Day: Day prior to the expiration date of each month
Exercise Style: European-style exercise - exercised only on the expiration date
Trading Hours: 8:30 a.m. - 3:15 p.m. Central time
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 http://www.cboe.com/, named "Best of the Web" for options information and education.
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.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
In connection with the proposed restructuring transaction, CBOE Holdings, Inc. ("CBOE Holdings") has filed certain relevant materials with the United States Securities and Exchange Commission (SEC), including a registration statement on Form S-4. Members are encouraged to read the registration statement, including the proxy statement/prospectus that are a part of the registration statement, because it contains important information about the proposed transaction. Members are able to obtain a free copy of the proxy statement/prospectus, as well as the other filings containing information about CBOE Holdings and the Chicago Board Options Exchange, Incorporated ("CBOE"), without charge, at the SEC's Web site, http://www.sec.gov/, and the companies' website, http://www.cboe.com/.In addition, CBOE members may obtain free copies of the proxy statement/prospectus and other documents filed by CBOE Holdings or the CBOE from CBOE Holdings by directing a request to the Office of the Secretary, CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605.
CBOE Holdings, the CBOE and their respective directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of CBOE Holdings and of the CBOE is available in the prospectus/proxy statement.