CBOE BINARY OPTIONS ON THE S&P 500® INDEX (SPXSM)
Description:
CBOE Binary Options are contracts that have an "all-or-nothing" payout depending on the settlement price of the underlying broad-based index relative to the strike price of the binary option.
Binary Call Options pay either 1) a fixed cash settlement amount, if the underlying index settles at or above the strike price at expiration; or 2) nothing at all, if the underlying index settles below the strike price at expiration. Binary Put Options pay either 1) a fixed cash settlement amount, if the underlying index settles below the strike price at expiration; or 2) nothing at all, if the underlying index settles at or above the strike price at expiration.
Underlying:
S&P 500 Index (SPX)
Symbols:
BSZ
Multiplier:
$100
Strike Price Intervals:
Strike prices may be listed with a minimum interval of 5 points.
Strike (Exercise) Prices:
In-, at- and out-of-the-money strike prices are initially listed. New strikes may be added as the underlying index moves up or down and upon request.
Premium Quotation:
Bids and offers will be expressed in pennies, and will range from 0.00 to 1.00. The total value of S&P 500 Binary Options will be the bid/offer multiplied by the contract multiplier. The minimum tick for S&P 500 Binary Options will be 0.01 ($1.00).
Expiration Date:
Generally, the Saturday following the third Friday of the expiration month.
Expiration Months:
Initially, only three (3) consecutive near-term contract months will be listed.
Exercise Style:
European - S&P 500 Binary Options may be exercised only on the last business day prior to expiration. Writers are subject to assignment only at expiration. Automatic exercise for S&P 500 Binary Call Options occurs if the exercise-settlement value of the S&P 500 Index equals or exceeds the S&P 500 Binary Call Options strike price.
Last Trading Day:
The business day (usually a Thursday) preceding the day on which the exercise-settlement value for S&P 500 Binary Options is calculated.
Settlement Value:
Exercise will result in delivery of cash on the business day following expiration. The exercise-settlement value, SET, is calculated using the opening sales price in the primary market of each component security on the last business day (usually a Friday) before the expiration date. The exercise-settlement amount is equal to the difference between the exercise-settlement value and the exercise price of the option, multiplied by $100.
Position Limits:
The position limit for S&P 500 Binary Options is 1,500,000 contracts on the same side of the market.
Margin
Purchases of S&P 500 Binary Options must be paid for in full. Customer margin for uncovered writers is the difference between the fixed cash settlement amount and the proceeds received from the sale of the S&P 500 Binary Option.
Trading Hours:
8:30 a.m. to 3:15 p.m. Central Time (Chicago time)