Nanos: Cash Settlement for the Win-Win
Pop quiz — what does cash-settled mean?
Why do you even care about that? Should you?
I mean, it has the word “cash” right there in it, so yeah you should... but it’s more than that.
Let’s take a look, yeah?
As you might or might not know, options contracts on stocks settle into shares. So, it just works like this. Once you exercise an option you hold – let’s say it’s a call option – you can buy and receive shares. But they’re just that – shares.
Not gold bars... Not stacks of dolla bills... Shares.
But with index options like Nanos, any earnings settle into sweet, sweet cash.
And why is all of this even possible? Well, because the value of Nanos is based on the value of the S&P 500 Index*.
And when you trade options on an index, cash settlement is one of the benefits you could enjoy. This gives you the flexibility to use your cash as you see fit – including making more trades if you wanna.
Welcome Nanos – a new, nimbler option for options traders.
* Nanos trade on Cboe as a $1 multiplier option (versus a $100 multiplier for standard options) on the Mini- S&P 500 Index, which is 1/10th the value of the S&P 500 Index.
Options are not suitable for all investors. Before trading Nanos, you should discuss with your broker whether trading Nanos is right for you and review the Characteristics and Risks of Standardized Options (or Options Disclosure Document) regarding risks associated with trading options.
Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (also referred to as the Options Disclosure Document or ODD). Copies of the ODD are available from your broker or from The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200, Chicago, IL 60606 ([email protected]). The information in this document is provided for general education and information purposes only. No statement(s) within this document should be construed as a recommendation to buy or sell a security or to provide investment advice. Supporting documentation for any claims, comparisons, statistics, or other technical data in this document is available by contacting Cboe Global Markets at www.cboe.com/contact. Past performance is not predictive of future returns. Cboe®, Cboe Global Markets®, Cboe Volatility Index®, FLEX®, VIX®, and XSP® are registered trademarks and NanosSM, Nanos by CboeSM, Cboe NanosSM, Nanos OptionsSM, and Options InstituteSM are service marks of Cboe Exchange, Inc. or its affiliates. S&P 500® and SPX® are registered trademarks of Standard & Poor’s Financial Services, LLC and have been licensed for use by Cboe Exchange, Inc. All other trademarks and service marks are the property of their respective owners. © 2022 Cboe Exchange, Inc. All rights reserved.