Here is a three-part answer to this question: In March 2002 the Cboe began disseminating BXM prices as a general indication of a hypothetical S&P 500 buy-write strategy.
The Cboe does not provide specific recommendations for investment funds, but interested investors might explore the possibility of doing some research on the returns and risks of investment funds that engage in covered call writing for at least a portion of their investment portfolios. Reports indicate that there now are investment products designed to track the BXM Index, including a structured product, closed-end fund, exchange-traded note (ETN), and exchange traded fund (ETF). Experienced investors also could ask their brokers about the possibility of directly engaging in an S&P 500 buy-write strategy by investing in stocks and SPX options.
As always, investors interested in this and other buy-write strategies should consult with their brokers and legal advisors for applicable advice on relevant issues, including but not limited to considerations regarding margin requirements. For more information about margin requirements, please see Cboe Rule 12.3,
Cboe Regulatory Circular RG99-09
, and the Cboe web site at
. In addition, please see
Regulatory Circular RG02-46
-- "Time at Which Expiring AM-Settled Index Options are Considered Exercised, Assigned or Purged."