S&P 100 FAQs

S&P 100 Index Options - OEX
S&P 100 Index Options - XEO
iShares S&P 100 Index Options - OEF

S&P 100® Index Options - OEX, XEO, & OEF

What is the S&P 100?

The S&P 100 Index (ticker symbol OEX) is a capitalization-weighted index, covering a broad range of industries. Each OEX index option contract represents 100 times the current value of the Index. For example, when the Index is at 600, the dollar value the index options will cover will equal $60,000 (or 100--the multiplier--times 600).

Who created the S&P 100 (ticker symbol OEX)?

The OEX was created by the Chicago Board Options Exchange (CBOE) and originally represented the top 100 stocks that traded on the CBOE in 1983. However, Standard & Poor's now manages the S&P 100 and is responsible for the addition and deletion of securities.

Who uses S&P 100 options?

Users of S&P 100 index options fall in two broad categories: institutional asset managers and traders, and individual investors.

Individual investors who use S&P 100 options cover a broad spectrum, from conservative blue-chip investors to more aggressive stock market traders. However, depending upon your particular financial goals and investment objectives, S&P 100 options may or may not be right for you. You should seek professional investment advice; please consult with your broker and/or financial advisor before you invest in S&P 100 options.

Why come to the CBOE to participate in movements of the broad stock market?

S&P 100 option contracts are a proven financial instrument, with an established and active market. S&P 100 options are traded only at the Chicago Board Options Exchange, the world's first and largest options exchange. S&P 100 options are cleared by the Options Clearing Corporation, which has received a triple-A credit rating. More than one billion S&P 100 contracts have been traded since the CBOE launched the trading of OEX, the first cash-settled securities product, on March 11, 1983.

Is the settlement for S&P 100 options American-style or European-style? Prior to 2001, S&P 100 options were American-style only. This means they can be exercised on any business day prior to expiration. However, most other index options are European-style, meaning that they may be exercised only during a specified period of time just prior to its expiration. In 2001 CBOE introduced European-style S&P 100 options (XEO), so that customers will be offered both American- and European-style S&P 100 options. S&P 100 options, available in each of the four nearby months, expire on a monthly basis. The expiration date is the Saturday immediately following the third Friday of the expiration month until February 15, 2015. On and after February 15, 2015, the expiration date will be the third Friday of the expiration month. Settlement value is tied to the S&P 100 at expiration or to the value of the Index when the option is exercised. This value is calculated by Standard and Poor's. OEX options are cash-settled. This means that cash is delivered at settlement, not securities.

What industry groups are the S&P 100 components drawn from?

The S&P 100 companies are drawn from a variety of industry groups, as shown in the pie chart below.

How is the Index calculated?

The index is calculated by the Standard & Poor's Corporation and is capitalization-weighted. This means that it gives greater weight to those stocks with greater market value. The market value is determined by multiplying the number of shares outstanding by the price per share.

The market value of all of the stocks in the index are added together and divided by a "divisor", the result is the current value of the S&P 100 Index. Capitalization weighting allows for the index to accurately reflect the performance of the market's largest and most popular stocks.

Is the OEX similar to the Dow? Do the indexes move together?

No, OEX is not the Dow Jones Industrial Average! Both are popular indexes and do share many stocks, but they differ significantly in composition and weighting and therefore differ in movement. The Dow consists only of 30 large industrial stocks and is a price-weighted index. This means that the prices of the 30 stocks are totalled and then divided by a divisor. The S&P 100, which OEX represents, consists of 100 blue-chip stocks and is capitalization-weighted. This means that the index reflects the performance of 100 of the market's largest and most popular stocks. These differences can cause the two indexes to differ significantly in terms of movement. Over a long-range period of time they have moved in a similar pattern, but on a day-to-day basis they can vary substantially.

The performance of OEX has a high correlation with the S&P 500 Index (SPX), which is the institutional benchmark for the domestic equity market.

The five largest stocks (in terms of weighting) for some of the key CBOE stock index products are shown in the tables below. While the OEX, SPX, and NDX look to stock market capitalization for weighting (and stocks such as GE, Microsoft, and Exxon have surpassed $300 billion in market capitalization), the Dow Jones Industrial Average (DJX) is price-weighted and gives more weight to stocks with higher prices.

How often is the index recalculated during the trading day?

The index is calculated every 15 seconds by the Standard and Poor's Corporation.

How does exercise work regarding OEX options?

Although the value of your OEX options is based on the value of the S&P 100 Index, you will not receive, or have to deliver, stocks if you exercise the options. You will receive cash if the option has value at expiration. This is known as cash-settlement. This is a key difference between index options and equity options. Equity options can be exercised as a means to buy or sell the underlying stock. The process is different with index options because they are cash-settled. When an OEX option is exercised, the holder receives the in-the-money amount in cash.