As the November 8 date for the U.S. Presidential election approaches, I have heard quite a bit of interest from investors in the use of SPX and VIX options and VIX futures with various expirations over the next six weeks. Added expiration dates provide investors with the opportunity to implement more targeted buying, selling, hedging and spreading strategies.
As shown in the two tables below, a September 28 CBOE Circular, and on cboe.com, by the end of next week there will be SPXW option expirations on Nov. 2, 4, 7, and 9, and there are (or will be) expirations for both VIX futures and options on Nov. 2, 9, and 16.
SKEW CHART AND SPX EXPIRATIONS
The Livevol Pro skew chart below shows the estimated implied volatilities for S&P 500 options at various strike prices and many expirations mid-day on September 30. Note that, for example, the estimated implied volatility for the 1730 SPXW puts expiring on Nov. 11 is 29.35.
FEATURES OF THE NEW SPX MONDAY-EXPIRING WEEKLYS OPTIONS
Trading Hours — Extended and Regular Trading Hours currently in place for the existing SPX/SPXW options are being followed.
Ticker Symbol — SPX Monday-expiring Weeklys series are available for trading under option symbol SPXW.
Expiration and Final Trading Day
• SPX Monday-expiring Weeklys options are PM-settled.
• The expiration date (usually a Monday) will be identified explicitly in the expiration date of the product. If the Monday of the week in which the options expire coincides with an Exchange holiday, the expiration date will be on the next business day (usually a Tuesday). The expiration date for each option is also the last trading day for that option.
• SPX Monday-expiring Weeklys may expire on any Monday of the month, other than a Monday that coincides with an End-of-Month (“EOM”) expiration date.
• Expiring SPX Monday-expiring Weeklys options will cease trading at 3:00 p.m. Central time on their last trading day. All non-expiring SPX Monday-expiring Weeklys options will continue to trade until 3:15 p.m. Central time.
• SPX Monday-expiring Weeklys option series will not be included in the strip of option series that will be used to calculate the CBOE Volatility Index (“VIX Index”) spot value or the exercise or final settlement value of VIX Index options and futures.
The microsite for SPX Weeklys options is at www.cboe.com/SPXW.