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Archived CBOE, CBSX, & CFE Press Releases


FOR IMMEDIATE RELEASE


CBOE TO LIST CBOE S&P 500 BUY WRITE INDEX OPTIONS


INTERLAKEN, SWITZERLAND, and CHICAGO, IL, September 4, 2008 - The Chicago Board Options Exchange (CBOE) today announced plans to begin trading CBOE S&P 500 BuyWrite Index (1/10th value) options (ticker symbol BXO). The new options contract is expected to begin trading on September 23.

The CBOE S&P 500 BuyWrite Index (ticker symbol BXM) on which the BXO is based is a broad-based benchmark index that tracks the performance of a hypothetical BuyWrite (covered call) strategy against a long portfolio of stocks in the S&P 500 Index. With $30 billion in BuyWrite products launched since CBOE's BXM Index was introduced in 2002, BXM Index options are a logical addition to CBOE's product mix. The options, based on 1/10th the value of the BXM, will allow flexibility in trading and managing risk in covered call portfolios and structured products.

"The CBOE S&P 500 BuyWrite Index was the first major benchmark index for options-related performance. The historical performance of the Index, which now dates back 22 years, makes it a valuable tool to assess the ways in which options can be used in allocating assets to boost risk-adjusted returns," said CBOE Chairman and CEO William J. Brodsky. "The addition of options on the CBOE S&P 500 BuyWrite Index further leverages the value of the underlying Index, putting into play another tool to manage portfolio performance."

Early in the decade, CBOE received general interest from institutional and individual customers in having the Exchange create a benchmark index to measure the performance of certain stock and options strategies. The BXM Index was developed by the CBOE in cooperation with Standard & Poor's. To help in the development of the BXM Index, the CBOE commissioned Professor Robert Whaley (then of Duke University) to compile and analyze relevant data from the time period from June 1988 through December 2001. The BXM price history recently was extended back to June 30, 1986. The BXM received the inaugural "most innovative index" award at the world's leading indexing conference.

Key facts about the performance of the BXM Index from June 1986 through July 31, 2008, include:
- The gross amount of premiums generated by the BXM Index was 1.6 percent per month;
- The BXM Index had about two-thirds the volatility of the S&P 500 - the standard deviation of monthly returns was 10.2 percent for BXM and 14.9 percent for the S&P 500;
- The BXM had annualized returns of 10.3 percent, slightly higher than the 10.1 percent for the S&P 500 total return index.


CBOE S&P 500 BuyWrite Index Options
Product Specifications

Underlying
BXO is 1/10th the value of the CBOE BuyWrite Index (BXM).


Strike Price Intervals
Minimum of one-point increments.


Strike (Exercise) Prices
In-, at- and out-of-the-money strike prices are initially listed. New series generally will be added when the underlying shares trade through the highest or lowest strike price available and upon request.


Expiration
Date
Generally the third Friday of the expiring month.


Expiration Months
Up to three near-term serial contracts and three contract months on the March quarterly cycle (March, June, September and December)


Last Trading Day
Close of trading on the business day prior to the expiration date of each month.


Exercise Style
European style - may be exercised only on the Expiration Date.


Settlement of Option Exercise
Based on a Special Opening Quotation of the BXM Index.


Margin
Uncovered writers must deposit 100% of the options proceeds plus 15% of the aggregate contract value (current BXO price multiplied by $100) minus the amount by which the option is out-of-the-money, if any. Minimum margin is 100% of the option proceeds plus 10% of the aggregate contract value. Long puts or calls must be paid in full.


Trading Hours
8:30 a.m. - 3:15 p.m. (Chicago time)

For a complete overview of CBOE S&P 500 BuyWrite Index options, see www.cboe.com/BXM.

CBOE BXM Index futures currently also are traded on the Index at the CBOE Futures Exchange (CFE).

CBOE, the largest options marketplace in the U.S. and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC).For additional information about the CBOE and its products, access the CBOE website at: www.cboe.com.


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®, XEO®, OEX®, CBSX® and CBOE Stock Exchange® are registered trademarks of Chicago Board Options Exchange, Incorporated.SPXSM, XSPSM, MNXSM, GVZSM, EVZSM, OVXSM, BXOSM, RUHSM, VXDSM, VXNSM, RVXSM, VPDSM, VPNSM, VTYSM, VXOSM, and VXVSM are service marks of Chicago Board Options Exchange, Incorporated.CFE® is a registered trademark and CBOE Futures ExchangeSM is a service mark of CBOE Futures Exchange, LLC.Dow Jones®, DJIA®, and DIAMONDS® are registered trademarks of Dow Jones & Company, Inc. Dow Jones Industrial AverageSM and Options on the DowSM are service marks of Dow Jones & Company.CBOE's Options on the Dow based on the Dow Jones Industrial Average and financial products based on the CBOE DJIA Volatility Index are not sponsored, endorsed, marketed or promoted by Dow Jones. S&P®, S&P 100®, S&P 500®, and SPDR are registered trademarks of the McGraw-Hill Companies, Inc. and are licensed for use by the Chicago Board Options Exchange, Incorporated pursuant to a License Agreement. The Russell 2000® Index is a registered trademark of The Frank Russell Company used under license.Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, and PowerShares QQQ TrustSM are trademarks of The Nasdaq Stock Market, Inc. iShares is a service mark of Barclays Global Investors, N.A. "HOLDRS" and "Holding Company Depositary ReceiptS" are service marks of Merrill Lynch & Co., Inc.

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.


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