Since 1983 investors have used options on the benchmark S&P 500® (SPXSM) Index for a variety of purposes, including investing, hedging, income, asset allocation, and the management of risk.
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."
||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
||SPXPM - SPXPM; Weeklys - SPXW; Quarterlys - SPXQ
||SPXPM - SPXPM; Weeklys - SPX; Quarterlys - SPX
||SPXPM - SPXPM; Weeklys - SPX; Quarterlys - SPX
|AM or PM Settlement
|Notional Size (approx.)
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.
- Potential for Lower Portfolio Volatility with Writing of SPX Options. Both the BXM and PUT Indexes have had lower volatility than the S&P 500 and some other leading stock indexes over more than two decades.
Investors appreciate many features of the SPX options, including:
- the fact that the options are tied to the world's leading benchmark for institutional investors;
- SPX options are powerful, flexible tools that allow investors to synthetically adjust their positions to a 500-stock portfolio;
- these listed options minimize counterparty risk - they are guaranteed by The Options Clearing Corporation;
- there is price discovery in competitive, SEC-regulated auction markets.
Press Release re: SPXpm "Super Leaps" Options on March 1, 2012
Standard & Poor's - "Capturing the Index Effect via Options."(June 2008)
Callan Associates - "An Historical Evaluation of the CBOE S&P 500 BuyWrite Index Strategy."
Ibbotson Associates - "Highlights from Case Study on BXM Buy-Write Options Strategy."
Spreadsheets with Historical Price Data
Historical Daily Prices - Spreadsheet with Closing Prices for Several Indexes
Historical Month-end Prices - Spreadsheet with Closing Prices for Several Indexes
In addition, Market Data Express gives users access to more than 16 years of historical options data
Simple Options Profit-and-Loss Diagrams
The CBOE S&P 500 BuyWrite Index (BXMSM) is designed to represent a proposed hypothetical buy-write strategy. Like many passive indexes, the BXM Index does not take into account significant factors such as transaction costs and taxes and, because of factors such as these, many or most investors should be expected to underperform passive indexes. Investors attempting to replicate the BXM Index should discuss with their brokers possible timing and liquidity issues. Transaction costs and taxes for a buy-write strategy such as the BXM could be significantly higher than transaction costs for a passive strategy of buying-and-holding stocks. Past performance does not guarantee future results. Standard & Poor's®, S&P®, and S&P 500® are registered trademarks of The McGraw-Hill Companies, Inc. and are licensed for use by the Chicago Board Options Exchange, Incorporated (CBOE). CBOE, not S&P, calculates and disseminates the BXM Index. The CBOE has a business relationship with Standard & Poor's on the BXM and PUT Indexes. CBOE S&P 500 BuyWrite IndexSM BXMSM are servicemarks of the CBOE. The methodology of the CBOE S&P 500 BuyWrite Index is owned by CBOE and may be covered by one or more patents or pending patent applications.
Options involve risk and are not suitable for all investors. Prior to buying or selling options, a person must receive a copy of Characteristics and Risks of Standardized Options(ODD). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606. The information in these materials is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in these materials. No statement within these materials should be construed as a recommendation to buy or sell a security or to provide investment advice. Any strategies discussed, including examples, do not include commissions, dividends, margin, taxes, and other transaction costs. However, these costs will affect the outcome of transactions and should be considered. S&P 100 and S&P 500 are registered trademarks of the McGraw-Hill Companies, Inc., and are licensed for use by the Chicago Board Options Exchange, Inc. (CBOE). The "Russell 2000 Index is a registered trademark of Frank Russell Company. The Nasdaq 100 is a registered mark of The Nasdaq Stock Market, Inc. "Dow Jones SM", Dow Jones Industrial AverageSM", "Dow Jones Transportation AverageSM," and "Dow Jones Utility AverageSM" are service marks of Dow Jones & Company, Inc. and have been licensed for certain purposes by the CBOE. LEAPS, FLEX, FLexible EXchange, CBOE, Chicago Board Options Exchange and OEX are registered trademarks of CBOE, and Long-term Equity AnticiPation SecuritiesTM and SPXTM are trademarks of the CBOE.
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