S&P 500® Index Options - PM-Settled (SPXPM) www.cboe.com/SPXPM


SPXpmSM Options

To complement CBOE's flagship SPX contract, which features AM settlement, CBOE also offers S&P 500 Index options with PM settlement. SPXpm options can be used by investors with end-of-day reporting needs, as well as those who wish to trade in and out of positions on Expiration Friday. In addition, SPXpm options trade on CBOE's Hybrid Trading System, allowing investors to choose electronic or open-outcry trading.

Beginning on Thursday, October 1, 2015, the trading hours for options on SPXpm begin at 2:00 a.m. Central time (Chicago time). Please visit the Extended Trading Hours webpage for more details.

SPXpm Transitioned from C2 to Hybrid Trading on CBOE

In February 2013 CBOE Holdings transitioned its SPXpm product from its all-electronic C2 Options Exchange (C2) to Chicago Board Options Exchange (CBOE), where it is traded on CBOE's hybrid trading model, which incorporates both electronic and open outcry trading. The migration of SPXpm from C2 to CBOE is designed with the goal of increased access and liquidity by exposing the product to an even broader user base and simplifying spread trading. CBOE's flagship SPX option, which is a.m.-settled, will continue to trade in CBOE's open outcry environment under ticker "SPX."

Key features of SPXpm options include:

    • Point-and-click access available
    • 100 multiplier and a large notional size
    • Contract size is ten times larger than SPY (SPDR ETF) options making it more cost effective
    • Aligns with single-stock options and ETF options
    • Preferred by many investors including those with end-of-day reporting needs
    • The ability to trade in and out of positions on settlement day
    • Like SPX and most other index options, and unlike SPY and other ETF options
    • No risk of early assignment and loss of dividends, no portfolio disruption on assignment
    • CBOE Circulars (RG99-09 and RG00-171) allow SPX options to be written on a "covered" basis against SPY or IVV ETF shares in a margin account, provided the investor's brokerage firm has such policies in place
  5. Margin
    • CBOE Regulatory Circular RG15-183 notes that CBOE rules allow a short position in a cash-settled-index option established and carried in a margin account to receive covered margin treatment, if the short option position is offset in the same account by an equivalent position in an index-tracking ETF that is based on the same index that underlies the short option(s).

      In order to receive covered margin treatment, the market value of the offsetting ETF position must be equivalent or exceed the current aggregate index value of the option being covered. One should note that not all ETFs are managed so as to maintain a share price that is a constant fraction (e.g., 1/10 th, 1/100 th, 1/1,000 th, etc.) of the index being tracked.
    • 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*

Expiring SPXpm Options Cease Trading at 4:00 p.m. Eastern Time on Their Last Day of Trading

On their last day of trading, all expiring SPXpm options listed cease trading at 4:00 pm (Eastern time) / 3:00 p.m. (Chicago time). All non-expiring SPXpm options will continue to trade until 4:15 p.m. (Eastern time) / 3:15 p.m. (Chicago time). For additional information please refer to the following circular: http://www.c2exchange.com/publish/RegCir_C2/C2RG11-040.pdf.

Comparison of Key Options Products Based on the S&P 500 Index

Description S&P 500 Index Options - Traditional S&P 500 Index Options - SPXPM, Weeklys and Quarterlys Mini-SPX Index Options - XSP SPDR ETF Options
Root Ticker Symbols SPX SPXPM - SPXPM; Weeklys - SPXW; Quarterlys - SPXQ XSP SPY
Options Chain SPX SPXPM - SPXPM; Weeklys - SPX; Quarterlys - SPX XSP SPY
Underlying Index SPX SPXPM - SPXPM; Weeklys - SPX; Quarterlys - SPX XSP SPY
AM or PM Settlement AM-settled PM-settled PM-settled PM-settled
Notional Size (approx.) $140,000 $14,000 $14,000
Exercise-Style European American
Settlement Type Cash Physical ETF

* 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.