Key features of SPX options include:
- Large Notional Size -- around $140,000 per Contract in November 2012 (10 times that of SPDR options)
- No Early Exercise of SPX Options - European-style Exercise
- Cash-settlement with No Delivery of Stocks or ETFs
- Price and Quote Transparency with Competitive Auction Markets for Leading Option Contracts
- Daily Mark-to-market for SEC-regulated securities
- Clearance of Transactions is guaranteed by the Options Clearing Corporation
- Average Daily Volume in October 2012 was 134,961 for SPX Weekly options (an all-time record) and 657,892 for all SPX options.
- Tax Treatment under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options, including SPX and SPXpm, are entitled to be taxed at a rate equal to 60% long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code*
* Investors should consult with their tax advisors to determine how the profit and loss on any particular option strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations.